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Analyst Says the Worst Month for Stocks Since 1950 Is Setting Up Wrong This Year
24/7 Wall St. • • business
Key Points:
- Ryan Detrick, chief market strategist at Carson Group, argues that despite September's historical reputation as the worst month for the S&P 500, this year’s strong market performance and broad participation suggest the calendar effect may not apply.
- The S&P 500 has shown strong breadth with nearly 70% of stocks above their 200-day moving average and solid earnings growth across 10 of 11 sectors, indicating a healthy market backdrop unlike past weak Septembers.
- Volatility remains low and the market is calm, but low trading volume in August could lead to amplified moves once trading activity resumes, warranting caution.
- Elevated 10-year Treasury yields near recent highs pose a fundamental risk to equity valuations independent of seasonal trends, especially ahead of Federal Reserve Chair Kevin Warsh’s speech, which could influence rate-cut expectations.
- Investors should weigh the strong earnings and market breadth against rising yields, recognizing that historical seasonal patterns may not hold when underlying conditions differ significantly.
