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“Show me a man with a million dollars, and I’ll show you a million guys trying to take it away from him.” – Mickey Rooney

Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.  

We’re heading into the home stretch of September, and with the S&P 500 up nearly 1% on the month, bulls couldn’t ask for much better especially when you consider how things looked on the 6th. This morning, there’s not a lot going on and futures are trading little changed with S&P 500 futures down slightly and the Nasdaq up slightly.  Treasury yields aren’t showing much direction either with the short-end of the curve unchanged while the 10-year yield is up just two basis points. The only economic data on the calendar is the Chicago Fed National Activity Index at 8:30 and flash September PMI readings for the Manufacturing and Services sectors at 9:45.

Getting back to September’s performance, last Thursday’s record closing high for the S&P 500 was notable not only for the fact that it was the first record closing high for the index since mid-July but also because it’s relatively uncommon for the S&P 500 to hit a record high in September. As shown in the chart below, since 1945, there have been fewer record highs in September (5.9%) than any other month. As shown in the chart below, the frequency of record highs tends to drift lower throughout the year with a ‘blip’ in July where just over 10% of all record highs have been recorded.  November, however, stands out for having the highest frequency of highs at 11.8%, or twice the rate of September.

So, does a new record closing high in September bode well for the rest of the year?  The chart below shows the S&P 500’s historical Q4 performance since 1945, and the blue bars indicate years when there was a record high in September. In the 21 prior years when there was a record high in September, the median rest-of-year performance was +4.7% with gains just over 90% of the time. That median gain is nothing to sneeze at, but it’s slightly less than the median for all years since 1945 (5.3%) although not quite as consistent to the upside (80%).