Is It Time For That September Weakness?

Equity returns during September have historically been weak, as we noted in Everything You Wanted To Know About September, But Were Afraid To Ask. Since 1950*, no month for the S&P 500 Index sported a worse average return, and over the past 20 years only August had a lower average return. So what about this year? With a strong start to the month that included several record new highs, does this negate the potential for a September pullback?

Per Ryan Detrick, Senior Market Strategist, “We all know that September is a tricky month, but what falls through the cracks is that the first half of the month has usually been okay; it is the end of the month that seems to be when the wheels have tended to fall off.”

With the S&P 500 having gone more than a year without a 2% weekly decline and more than 10 months since its last 3% decline (from peak to trough), we would advise increased caution as we head into this tricky seasonal period.

 

IMPORTANT DISCLOSURES

*Please note: The modern design of the S&P 500 stock index was first launched in 1957. Performance back to 1950 incorporates the performance of predecessor index, the S&P 90.

The economic forecasts set forth in the presentation may not develop as predicted.

The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

Investing in stock includes numerous specific risks including: the fluctuation of dividend, loss of principal and potential illiquidity of the investment in a falling market.

Indices are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. Past performance is no guarantee of future results.

The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security.

This research material has been prepared by LPL Financial LLC.

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