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“Only those who will risk going too far can possibly find out how far one can go.” – T.S. Eliot
Welcome back. While the weather outside may suggest otherwise, the unofficial end to summer has come and gone, football season is ready to kick off, pumpkin-flavored coffee, beer, and bread is everywhere you look, and before you know it, the leaves will start turning. Equity markets are heading into the fall season with more green than red, but treasuries are lower and yields are higher heading into what will be a quiet day in terms of data to kick off the holiday-shortened week.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, including the latest US and international COVID trends.
With the unofficial end to summer behind us, we wanted to provide a quick summary of how the S&P 500 has historically performed the day after Labor Day (we covered other post-Labor Day performances in today’s Morning Lineup). In the post-financial crisis period since 2010, there has clearly been a Labor Day hangover with the S&P 500 trading lower nearly three-quarters of the time for a median decline of 0.17%, including declines on this day in each of the last four years. From a longer-term vantage point since 1945, the day after Labor Day hasn’t been as negative with a median gain of 0.15% and positive returns 53% of the time. Lastly, with the S&P 500 up just over 20% already this year, we also looked at years where the S&P 500 was up at least 15% YTD heading into Labor Day weekend, and in these scenarios, returns were more positive. In the 16 prior years, the day after Labor Day had a median gain of 0.26% with positive returns half of the time.
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