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“You hit home runs not by chance but by preparation.” Roger Maris
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After three down days in a row for the S&P 500 and four for the Nasdaq, futures suggest that bulls may end up going o-fer the week. While they are down, the magnitude of the losses at this point remains modest, so anything can happen. Crude oil prices are back to their winning ways this morning after yesterday’s decline ended a nine-day winning streak, and treasury yields are basically flat on the day. It’s a slow day for data and earnings, although NY Fed President Williams spoke last night and suggested that officials need to see more data before determining what to do with rates. At this point, a hike in September (or even November) looks highly unlikely.
September has historically been a weak month for stocks, but when it comes to seasonal market trends, as Charles Dickens may have put it, it’s a tale of two timeframes. The snapshot below comes from the Seasonality Tool on our website, and it shows the S&P 500’s median performance in the one and three months following the close on 9/8 based on the last ten years of trading.
In the month following the close on 9/8, the S&P 500’s median performance over the last ten years has been a decline of 0.62% which ranks in just the ninth percentile relative to all other rolling one-month periods. Not that we need to tell you, but that’s pretty bad.
While seasonal trends for the upcoming month have been poor, performance in the three months following the close on 9/8 have been among the best relative to any rolling three-month period throughout the year. As shown below, the median gain of 4.65% ranks in the 87th percentile relative to all other three-month periods throughout the year.
The stock market may be coming up on the best of times when it comes to the calendar, but to get there, it must get through the worst of times first.
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