Stock Market Outlook: September 2024

And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free. “For the remainder of the year, the S&P 500 has posted respective average and median returns of 4.9% and 6.4% after May,” Turnquist says. While the economic outlook remains uncertain, there are reasons for investors to be optimistic in June and beyond. The Nasdaq composite index has recently lagged after a hot start to the year. But if traders continue to cash out of AI stocks, the Nasdaq could experience even more pain. The 2-year rate was up 6 basis points, at 3.97%, while the 10-year was up 5 basis points at almost 3.5%.

1. These are high-volume stocks whose earnings reports are often major trading events for options traders and day traders.
2. “When we had such a terrible pullback last year, that was partly in reaction to the Fed aggressively raising interest rates,” Hougan said in a call.
3. According to Bespoke Investment Group, October has historically been the month the biggest stock market surges have begun.
4. And as September began, the S&P 500 had its worst week in a year and a half.

The Fed’s quarterly Senior Loan Officer Survey has finally been released, and as expected, most banks reported tighter lending conditions. But according to at least one analyst, things aren’t looking as bad as some had feared. The largest cryptocurrency on Monday fell to as low as $27,339, the lowest level since April 26, according to CoinDesk data. Bitcoin is up over 70% so far this year, but is still down almost 60% from its all-time high in 2021. In particular, he pointed to the three-month moving average of private-sector job gains dipping below 100,000.

Realtime Prices for Dow Jones Stocks

By its tally, there have been 61 rallies of 10% or more since World War II, and 19 of them started in October. March has 10 while all the other months are in the low- to mid-single digits. Stock markets are volatile and can fluctuate significantly in response to company, industry, political, regulatory, market, or economic developments. Past performance and dividend rates are historical and do not guarantee future results. Views expressed are as of the date indicated, based on the information available at that time, and may change based on market or other conditions.

This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. The shares included in it are weighted according to price; the index level represents the average of the shares included in it. Investors should focus on quality and income stocks, with market volatility here to stay through 2027, BofA said. The job market, meanwhile, held up as expected in the month of August, with the unemployment rate declining slightly to 4.2%.

Meyer added that savers who don’t need their money for 1 to 2 years should consider long-duration CDs. “Putting money into a CD right now guarantees you a relatively high rate,” she said, compared to the lower rate you might earn in a high-yield savings account after interest rates drop. But Paré and Woods both say that some people can find themselves unable to control the risks of their sports betting behavior. In other words, heavy sports betting can sometimes be a form of gambling addiction.

If you have a long-term investment strategy with a time horizon of years or decades, it’s probably a good idea to ignore any temporary market corrections. If you are a trader with a time horizon of weeks or months, the August weakness may be a sign the AI technology trade is unwinding in the near term. The S&P 500 has historically averaged 7 phases of software development life cycle infographic roughly a 10% annual return since 1957. It’s best to monitor economic data, pay attention to Federal Reserve commentary and track election results. That said, you’ll need to remain flexible to take advantage of changing conditions.

What of the Fed?

The Vanguard Value ETF (VTV) has generated a total return of just 6.3% year-to-date, bollinger bands strategy forex while the Vanguard Growth ETF (VUG) has generated a total return of 14.7%. The stock market has proved resilient in the face of growing recession fears, with support tied in part to expectations the Federal Reserve will pivot to rate cuts well before year-end. Investors should think through what that scenario would say about the backdrop for equities, said Seema Shah, chief global strategist at Principal Asset Management, in a Monday note. Softer U.S. economic data may point to weaker earnings over the next several months as corporates’ pricing power will erode as inflation cools, while labor… Having said that, it’s fair to note that valuations are historically high.

Put your investing ideas to work

Interest rate cuts are typically considered good news for stock prices, but the circumstances can vary. The market might not react positively if the Fed is forced to issue emergency rate cuts to stave off a recession. In its most recent economic projections from June, the FOMC projected just one interest rate cut by the end of 2024. However, the bond market is currently pricing in about a 60% chance the FOMC will cut rates by at least 100 bps by year’s end.

While interest rate cuts can benefit stock market investors by decreasing the cost of debt for businesses, they also decrease the yields that savers can earn on savings accounts and certificates of deposit (CDs). That growth is apparent in the stock prices of sports betting companies such as DraftKings (DKNG). DraftKings shares have roughly doubled in price since the company went public in 2020, albeit with significant volatility since then. The stock market is headed for a tough two months, but investors could still see a strong rally by the end of the year, according to one of Wall Street’s most bullish forecasters. The bond market is currently pricing in a 98.7% chance the Fed will maintain its current fed funds target rate range of between 5.25% and 5.5% at its June meeting, according to CME Group. “For rate cuts to be in the cards, the Fed will need to see a desperately struggling economy or a financial crisis — not a particularly favorable backdrop for investors,” she wrote.

Corporate Profits May Be More Important to Investors

The April jobs report on Friday showed the U.S. unemployment rate fell back to a multi-decade low of 3.4. Inflation will stay sticky and elevated as long as the labor market remains tight, arguing against Fed rate cuts. Of course, returns can only be above average for so long before mean reversion kicks in. But based on my modeling, I believe we are also in the seventh inning of this secular bull market.

Treasury bonds with long maturities is one option for savers who want a high yield in a falling interest rate environment, as a bond held to maturity has a fixed interest rate. She also noted that Treasury bond interest is exempt from state income tax. “When households are under stress, there are studies that show that their ability to think logically kind of goes down. So the focus becomes ‘how to make money fast.’ And if you believe you have an edge because of all the information you have regarding sports, that’s going to be your go-to,” Paré says. The National Football League’s regular season starts on Thursday, Sept. 5, when the Baltimore Ravens will face the Kansas City Chiefs. “The bottom line is that the US economy is not in a recession, and there are no signs of a recession on the horizon,” Apollo’s Tosten Sløk said.

Fortunately, most analysts remain optimistic the S&P 500 will resume its upward march. Historically, the three-month period of August through October has been a weak one for stocks. In fact, the S&P 500 endured a 10% correction in 2023 only to finish the year up 24%. Adam Turnquist, chief technical strategist at LPL Financial, said the S&P 500 averages around three pullbacks of at least 5% per year. Historically, the S&P 500 has averaged about one 10% pullback per year as well.

The July CPI report showed a modest month-over-month increase of 0.2%, and a year-over-year increase of 2.9%, which is closer to the level of the Fed’s 2% inflation target. Several recent economic data releases suggest that this strategy is working to tame inflation — but it may also be depressing economic activity a little bit more than investors would like. The Federal Reserve has raised interest rates almost a dozen times since 2021 in an effort to tamp down inflation by strategically slowing down the economy with higher borrowing costs. Woods adds that the opportunity cost imposed by betting money how to use scalping trading strategy instead of investing it can make it more difficult to achieve long-term goals such as retirement. “You’re missing out on an opportunity for the consistent value creation that we’ve seen in the stock market over the long term,” Woods says.