Good Riddance, October

Well, it’s a good thing that October is over. In the end, the S&P 500 Index lost 6.9%, for the worst month since September 2011.

Here are some of the highlights—or lowlights—from the month:

  • Besides being the worst month for the S&P 500 in seven years, the Dow Jones Industrial Average lost 5.1% for its worst month since January 2016, while the Nasdaq’s -9.2% return marked its worst month since November 2008. The big loser was small caps though, as the Russell 2000 Index fell 10.9%, its worst month since September 2011.
  • The six-month win streak for the S&P 500 is officially over. Want some good news? Since 1990, it has had 10 other 6-month win streaks, and the index was higher every single time 12 months later, up 13.6% on average.
  • The S&P 500 fell 16 days during the month, tying the most down days for any one month since October 2008.
  • The first back-to-back up days for the S&P 500 took place on the final two trading days of the month, with the index gaining more than 1% each day. This occurred nearly right on cue, as the end of the month tends to see the best moves.

Stocks Tend to Bounce the Last Part of October

  • In fact, the S&P 500 had gone 28 consecutive trading days without back-to-back up days. As our LPL Chart of the Day shows, that tied the longest streak going back to the Great Depression. That sums up how persistent the selling has been recently.

This Tied the Longest Streak Without Back-to-Back Up Days Since the Great Depression

  • After not a single 1% move up or down during the entire third quarter, the S&P 500 saw 10 changes of at least 1% up or down last month. That was the most for any month since 12 changes back in February 2018. October even had four changes of at least 2%, for the most since January 2016.
  • Lastly, turning to the Dow, in terms of the cumulative intraday range for the Dow during October, it moved a total of 9,872 points. Only February 2018 and October 2008 had larger movements.

“October was a rough ride, and most investors are likely quite happy to wave it goodbye. The good news remains that valuations are the lowest they’ve been in years, earnings continue to surprise to the upside, and November and December during a midterm year are historically quite strong,” summarized LPL Senior Market Strategist Ryan Detrick.

Gains During a Midterm Year Tended to Happen Late

For more on late year midterm strength, please read here and here.

We will take a closer look at the chance of a year-end rally in next week’s Weekly Market Commentary.



The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. The economic forecasts set forth in this material may not develop as predicted.

All indexes 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. All performance referenced is historical and is no guarantee of future results.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

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.

Dow Jones Industrial Average is the most widely used indicator of the overall condition of the stock market, a price-weighted average of 30 actively traded blue chip stocks, primarily industrials. The 30 stocks are chosen by the editors of the Wall Street Journal. The Dow is computed using a price-weighted indexing system, rather than the more common market cap-weighted indexing system.

The NASDAQ-100 is composed of the 100 largest domestic and international non-financial securities listed on The Nasdaq Stock Market. The Index reflects companies across major industry groups including computer hardware and software, telecommunications, retail/wholesale trade and biotechnology, but does not contain securities of financial companies.

The Russell 2000 Index is an unmanaged index generally representative of the 2,000 smallest companies in the Russell Index, which represents approximately 10% of the total market capitalization of the Russell 3000 Index.

This research material has been prepared by LPL Financial LLC.

To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial LLC is not an affiliate of and makes no representation with respect to such entity.

The investment products sold through LPL Financial are not insured deposits and are not FDIC/NCUA insured. These products are not bank/credit union obligations and are not endorsed, recommended or guaranteed by any bank/credit union or any government agency. The value of the investment may fluctuate, the return on the investment is not guaranteed, and loss of principal is possible.


Tracking #1-788494 (Exp. 10/19)