September has traditionally marked a shift in the stock market’s tempo. Historical data since 1928 showcases an average 1.1% dip during this month, a pattern that lends September its distinctive character. This year mirrors this trend, registering a slight 0.93% decline.
Among the contributing factors, we note:
• The Federal Reserve’s hawkish stance on inflation.
• Variations in Treasury yields (15 year high).
• Prevailing discussions on inflation, particularly in housing, gas, and consumer products.
• A robust job market.
• Labor strikes within the auto and screenwriting sectors.
• Fiscal debates in Washington concerning debt ceilings and budgets.
• Buzz around the forthcoming election cycle.
However, even in these fluctuating tides, the corporate world’s adaptability remains evident. The S&P 500 recorded an impressive earnings growth of 8.2% in the latest quarter and 6.5% in the first half of 2023. Although marginally slower than 2022, it’s a great sign. As uncertainties become clearer in the coming months, the market often responds with a favorable tilt. Moreover, with many portfolio managers reshuffling their assets this month, there’s potential to capitalize on the market’s strongest contenders.
Spotting Investment Prospects: In such dynamic market conditions, there lies the possibility of discovering underrated stocks. We’re honing in on value stocks, renowned for their enticing dividends and sturdy financial foundation. Equally, growth firms, especially those pioneering innovation and displaying accelerated earnings growth, capture our interest.
Navigating Market Currents: Steering through these market undercurrents demands both astute risk management and the patience and discipline to stay invested. For Fiscal Investors, the present might be a golden opportunity. Encouraging signs, like a revived IPO scene and noteworthy moves such as Cisco’s acquisition of Splunk, further emphasize market resilience.
Embracing September’s Potential: While September brings its share of stock market challenges, it’s also a month brimming with potential. Adopting a forward-thinking approach and a dash of perseverance can allow investors to tap into immense value. By focusing investments in value-centric stocks, boasting solid dividends and financial stability, and consistently adhering to one’s investment trajectory, the horizon looks promising for those with an enterprising spirit. Looking toward the long-term, this is a very exciting time to be investing.