{"id":50259,"date":"2023-08-18T19:48:07","date_gmt":"2023-08-18T23:48:07","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/stocks-are-having-a-lousy-august-why-september-could-be-worse\/"},"modified":"2023-08-18T19:48:10","modified_gmt":"2023-08-18T23:48:10","slug":"stocks-are-having-a-lousy-august-why-september-could-be-worse","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=50259","title":{"rendered":"Stocks Are Having a Lousy August. Why September Could Be Worse."},"content":{"rendered":"<div id=\"js-article__body\" itemprop=\"articleBody\" data-sbid=\"WP-BAR-0000723597\">\n<div data-layout=\"wrap\n              \" data-layout-mobile=\"\" class=\"\n        media-object\n        type-InsetMediaIllustration\n          wrap\n  article__inset\n        article__inset--type-InsetMediaIllustration\n          article__inset--wrap\n    article__inset--lead\n  \"><\/p>\n<p>        <!-- eventually when we know what this card will be we can change it and leave this one --><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        img-wrap\n        article__inset__image\n      \" itemscope=\"\" itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<\/figure><\/div>\n<p>Stocks are mixed on Friday, and look prepared to log another down week in a difficult month. Unfortunately for bulls, September may not look much better.<\/p>\n<p>All three major indexes are down in August: As of Thursday\u2019s close the<br \/>\n        Dow Jones Industrial Average<br \/>\n       is off 1.7%, the<br \/>\n        S&amp;P 500<br \/>\n       has slid 3.3%, and the previously highflying<br \/>\n        Nasdaq Composite<br \/>\n       has lost 5%.<\/p>\n<div class=\"paywall\">\n<p>Investors could chalk all that up to seasonality: As Fundstrat\u2019s Tom Lee noted at the start of the month, August is historically a difficult time for the stock market to make headway, and in a note to clients on Friday, he says that this particular August \u201cis proving to be even more treacherous than our \u2018be wary\u2019 view.\u201d<\/p>\n<p>There are in fact plenty of factors weighing on the market. As <em>Barron\u2019s<\/em> has noted in recent weeks, stocks are contending with factors like higher bond yields\u2014and worries about potential future interest-rate increases from Federal Reserve\u2014along with the drag from China\u2019s ongoing economic problems; even the U.S. economy\u2019s own strength is cause for concern, as it reinforces the Fed\u2019s case for more rate hikes.<\/p>\n<p>That said, the month\u2019s declines haven\u2019t shaken Lee\u2019s core bullish thesis. \u201cWe see this more as \u2018it\u2019s August\u2019 rather than the start of a larger rout\u2026we are not in the camp this spills over into a wider selloff. That could happen, but more bad things need to emerge. In fact, there are some signs that we could see the stocks begin to stabilize soon.\u201d<\/p>\n<p>He thinks the market could be in for a little more pain, but argues we could see a bottom as soon as next week, following earnings from<br \/>\n        Nvidia<br \/>\n       (ticker: NVDA), one of the biggest drivers of the 2023 rally, along with Fed Chair Jay Powell\u2019s upcoming Jackson Hole speech\u2014an event that marked the top last year, before the bear swoon began in earnest.<\/p>\n<p>Nonetheless, while Lee believes that the year-end outlook for the market, which strategists have been boosting lately, remains intact, others are concerned that the near-term selloff could continue. After all 2023\u2019s gains appear to already price in what was a best-case scenario at the start of the year, meaning investors are in search of more rally fuel that has been hard to come by.<\/p>\n<p>Quants have their worries too. ETF.com\u2019s Rob Isbitts on Friday warned, \u201cFrom a technical analysis standpoint, today\u2019s S&amp;P 500 exhibits a similar pattern to not one, but three August-September wrecks of the past: 1987, 2000 and 2022.\u201d<\/p>\n<p>Certainly history doesn\u2019t offer much hope in terms of near-term relief, given the dreaded September Effect. According to data compiled by Dow Jones, September is easily the worst month in terms of average monthly performance for all three major indexes: In September, the Dow falls an average of 1.08%, the S&amp;P 500 slips 1.12%, and the Nasdaq slides 0.85%, dating back to 1896, 1928, and 1971, respectively.<\/p>\n<p>The competition isn\u2019t even close with the other worst months\u2014February, August, and May, which offer much less-discouraging performances; October, for all its fearsome reputation, tends to see all three indexes rise. \u00a0<\/p>\n<p>Moreover, September is the only month of the year that the Nasdaq has historically notched a monthly loss\u2014a concern given how tech-heavy this year\u2019s rally has been.<\/p>\n<p>\u201cThe<br \/>\n        Nasdaq 100 Stock Index<br \/>\n       (NDX) has traded below its 10 daily moving average\u2026for more days in a row than at any time this calendar year,\u201d writes Bear Traps\u2019 Larry McDonald. \u201cThat is a change. We note changes.\u201d<\/p>\n<p>He also highlights that<br \/>\n        Invesco S&amp;P 500 Equal Weight<br \/>\n       exchange-traded fund (RSP) has continued to underperform the weighted<br \/>\n        SPDR S&amp;P 500<br \/>\n       ETF Trust (SPY), \u201cwhich is great when you are in [an] AI high but not so much when you are in high interest-rate-induced AI rehab.\u201d<\/p>\n<p>Other analysts are more sanguine, if clear-eyed about the possibility of near-term volatility. <\/p>\n<p>\u201cAs earnings season wind-down, we suspect a period of backing and filling will develop over the next several months,\u201d writes Piper Sandler\u2019s Craig Johnson. Still, he, too, kept his year-end S&amp;P 500 target above 4,800, writing that moderate pullbacks to key index support levels \u201cwill be viewed as buying opportunities, especially among sectors\/microgroups showing relative strength.\u201d<\/p>\n<p>In the end, the calendar alone doesn\u2019t control the stock market, but what\u2019s past is prologue, leaving investors understandably jittery on the threshold of September.<\/p>\n<p>If worries about interest rates, yields, and the global economy continue to dominate the narrative, summer\u2019s pain may last beyond the season.<\/p>\n<p>Write to Teresa Rivas at teresa.rivas@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.marketwatch.com\/articles\/stocks-september-volatility-fall-665944d?mod=markets\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Stocks are mixed on Friday, and look prepared to log another down week in a difficult month. Unfortunately for bulls, September may not look much better. All three major indexes are down in August: As of Thursday\u2019s close the Dow Jones Industrial Average is off 1.7%, the S&amp;P 500 has slid 3.3%, and the previously [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":50260,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-50259","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Stocks Are Having a Lousy August. Why September Could Be Worse. | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Stocks are mixed on Friday, and look prepared to log another down week in a difficult month. 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