![]() ![]() “Of the 14 bear market years since 1946 in which a bottom had not been set by the end of September, the S&P 500 was off 0.3% in October and down 1.9% in Q4, while posting only a 50% frequency of advance for both periods,” wrote Stovall in a Monday note. Dow Jones Market Data found the S&P 500 recorded positive returns between May and October in the past six years (see chart below).Īccording to Sam Stovall at CFRA Research, though the positive track record offers encouragement, bear markets have had a tendency to alter history. Seasonal trends, however, aren’t written in stone. “This could reinforce positive market seasonality, which is historically strong for the S&P 500 from November to April.” October crashes “Monetary policy works with a six-month lag, and between the and final two Fed meetings of 2022, we do see subtle movement toward a data-dependent Fed pause which would bullishly allow investors to focus on (improving) inflation data rather than policy,” wrote strategists led by Barry Bannister, chief equity strategist, in a recent note. #Wealth tracker stifel plusThey see positive catalysts between the fourth quarter of 2022 and the start of 2023 as Fed policy plus S&P 500 negative seasonality are headwinds that should subside by then. 3 record finish, is in a bottoming process. Strategists at Stifel, a wealth-management and investment banking firm, contend the S&P 500, which has fallen more than 23% from its Jan. ![]() Stock Trader’s Almanac, which is credited with coining the saying, found investing in stocks from November to April and switching into fixed income the other six months would have “ produced reliable returns with reduced risk since 1950.” That’s kind of something that we’re going through and you have to be very sensitive to how you manage all of that.”Īn old Wall Street adage, “ Sell in May and go away,” refers to the market’s historical underperformance during the six-month period from May to October. ![]() “A lot of mutual funds have their fiscal year-end in October, so there tends to be a lot of buying and selling to manage tax losses. “This is just such an atypical period for so many reasons,” Bassett told MarketWatch in a phone interview on Thursday. Ralph Bassett, head of investments at Abrdn, an asset-management firm based in Scotland, said these dynamics could only play out in “more normalized years.” Skeptics aren’t convinced the pattern will hold true this October. SOURCE: STOCKTRADERSALMANAC ‘Atypical period’ What that means for October.Īccording to Hirsch, Octobers in the midterm election years are “downright stellar” and usually where the “sweet spot” of the four-year presidential election cycle begins (see chart below). See: It’s the worst September for stocks since 2008. Of course 2022 is also a midterm election year, with congressional elections coming up on Nov. “Seven of these years were midterm bottoms.” October’s track record may offer some comfort as it has been a turnaround month, or a “bear killer,” according to the data from Stock Trader’s Almanac. Read: Stocks and bonds are ‘discounting for a disaster’ after the worst stretch for investors in 20 years Bear markets and midterms The Dow fell 8.8%, while the Nasdaq pushed its total monthly loss to 10.5%, according to Dow Jones Market Data. The S&P 500 recorded a monthly loss of 9.3%, its worst September performance since 2002. Stocks on Friday posted their worst skid in the first nine months of any year in two decades. The S&P 500Įach gained around 2.6% at the close, while the Nasdaq Composite stocks finished sharply higher on Monday to kick off October and the fourth quarter in an attempt to rebound from September lows. ![]()
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