The only difference between Monday, September 3, 2024, and August 31, 2024 is flipping the calendar. Markets thought otherwise. Yesterday, the Dow Jones (DJI) fell by 1.51%, Nasdaq (QQQ) lost 3.26%, and S&P 500 (SPY) fell by 2.12%.
Seasonally, September is the worst month for stocks. Ryan Detrick, Caron Group’s Chief Market Strategist, said that stocks had a negative return this month over the last 98 years. The pattern probably happens after people finish their summer vacation. They rebalance their investments, taking profits from stocks and building a bond position. In the last quarter, the 20+ Year T-Bill ETF (TLT) gained 6.71%. The 7-10 Year ETF (IEF) gained 4.61%. This closely matched the SPY ETF’s 4.6% return in the last three months.
History is not on September’s side. Peak fear happened in September 1931 during the Great Depression. In October 1929, stocks suffered the Wall Street crash. The same panic selling happened in October 1987. Sellers likely emerged in droves yesterday to avoid potentially weak markets.
In November, the U.S. will hold its Presidential elections. That is a possible turning point for the market’s sentiment. Between now and the elections, make a list of stocks to buy. The semiconductor sector has many stocks still trading at a premium. This includes Micron (MU), Intel (INTC), Broadcom (AVGO), and NXP Semiconductor (NXPI).
Watch banks, too. Goldman Sachs (GS) and Morgan Stanley (MS) trade near their 52-week high.
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