It seems to be unhealthy on the market.
It has been a tough yr for inventory markets and futures are pointing to a different drop right this moment after a powerful non-farm payrolls report. Thursday’s CPI knowledge is a serious threat as effectively.
One factor you would argue is that sentiment is already washed out and that the bears are in every single place. I am sympathetic to that and the concept all of the unhealthy information is already priced in. On the otherhand, Q3 reporting is coming and the robust greenback is an enormous drawback for multi-nationals. Earnings estimates have to come back down as effectively, and multiples are nonetheless wealthy (although a lot much less so in small caps).
In any case, take a look at these two charts. The primary is S&P 500 seasonality; which clearly exhibits a backside within the first week of October after which energy by way of yr finish.
The second is the political calendar. In the event you return 70 years and have a look at mid-term years in Presidential cycles, US equities are larger each single time from November throgh April, with a median of 16.2%. I am skeptical of rujnning numerical correlations on politics with shares normally however that is an ideal document.
h/t @SJD10304 and @TalionBen
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