With 1928 September is the worst month for the securities market. Average index S&P 500 drops by 1% in September. 2-th place by a huge margin is shared by February and May. During these months, the index usually loses 0,1 %.
The main dangers for the securities market in the coming September are still the same: easing policy FED and the spread of the SARS-CoV-2 delta strain.
At the meeting 22 September, the Fed will primarily assess macroeconomic data, like unemployment rate and inflation. The regulator may announce the reduction of stimulus steps at the next meeting, if the data on the labor market is positive. Otherwise, the Fed may postpone the decision for several months..
CPI data to be released a few days before Fed meeting, 14 September. If inflation continues to rise, then the effectiveness of treasury bonds may increase. Then financiers will start to rebalance the portfolio., and the stock market will correct.
The spread of SARS-CoV-2 also makes the economy unknown, as some companies are still not operating at full capacity. Due to the increase in the number of infections, attendance in the catering and trade industries is falling.
Despite the dangers and likely drawdowns in September, there is reason to be optimistic. Not so long ago, Wells Fargo calculated: if in the 1st 8 months S&P 500 grows by more than ten percent, then by the end of the year the index, usually, adds another eight percent.
Any historical data can be interpreted depending on personal beliefs., but it is hardly worth making investment decisions only on the basis of statistics. So the position of Liz Saunders, chief strategist Charles Schwab, looks convincing. Saunders finds it naive to think, that the market will follow the story: “Are there any risks, which will lead to a rollback of more than 3 or 4%? Yes. It might happen in September? Of course".
