The stock market’s worst month—September—will soon be upon us. The
The index has averaged a 1 percent loss in September dating back to 1928, according to Dow Jones market data. The
Dow Jones Industrial Average
it has seen a similar September loss since 1896. It is clearly the bad month for both indices. Last year, shares fell 4.8% in September. And who can forget Lehman Brothers? So, September 11?
There has been much debate about the explanation of the September phenomenon. More tangible are the worrying signs for this September. The indexes are up double-digit percentage rates from their 2022 lows in mid-June, boosted by cooling inflation and a cautious U.S. Federal Reserve. However, the likelihood of a three-quarter rate hike in September has increased, with a half-point increase less likely.
Then there are oil prices, which have fallen, putting extra money in consumers’ pockets. The price of West Texas Intermediate oil fell to the low $90s a barrel, but rose last week after Saudi Arabia’s proposals to cut production. Oil’s multi-year high, set earlier this year at over $100, is more than 10% above the current level. Oil prices have been hit by China’s economic slowdown. But China just cut a key interest rate, which could send prices rising again. Likewise, the protracted war in Ukraine could push up energy prices again as winter approaches.
Equity strategist Julian Emanuel believes the market’s recent ability to rally despite rising interest rates will fade. The good news: September sales may have already begun. The Dow and S&P 500 have fallen since Aug. 20, with the latter down about 4 percent. Let’s get this over with.
The Federal Reserve Bank of the United States Bank of Dallas releases Texas Manufacturing Outlook Survey for August. The consensus estimate is for a negative reading of 12.3, about 10 points better than July. Four of the five regional Federal Reserve bank surveys of business conditions had at least one negative print in the past two months, portending a significant slowdown in the manufacturing sector. Earlier this month, the New York Fed’s Empire State Manufacturing Survey posted its second-largest decline ever.
Bank of Montreal
Hewlett Packard Enterprise
quarterly results report.
The Labor Office Statistics publishes the Jobs and Turnover Survey. Economists forecast 10.3 million jobs on the last business day of July, down nearly 400,000 from June. Jobs remain at a historic high, but are off the 11.9 million peak since early March.
S&P CoreLogic releases the Case-Shiller National Home Price Index for June. House prices are expected to rise 19.5% year-on-year, following a 19.7% increase in May. Sales of new and existing homes have plummeted this year, but home prices remain near record highs.
The Council of the Conference publishes the Consumer Confidence Index for August. Consensus is for a reading of 96.5, about a point higher than July’s 95.7 number. The index has declined for three consecutive months.
ADP Publications National Employment Report. Economists forecast the economy added 250,000 nonfarm jobs in August. ADP changed its methodology, complicating comparisons with recent months.
Cos., MongoDB, Okta and
quarterly earnings release.
The Supply Institute Management publishes Chicago Business Barometer for August. Economists had forecast a reading of 51, down about one point from July. July’s reading of 52.1 was the lowest for the index since August 2020.
and Lululemon Athletica hold conference calls to discuss quarterly results.
The Census Bureau reports construction spending figures for July. Total spending is seen rising 0.2% monthly to a seasonally adjusted annual rate of $1.77 trillion. Construction spending fell 1.1 percent in June, the first decline since last September.
BLS releases the jobs report for August. Expectations are that nonfarm payroll employment will rise by 270,000, following a 528,000 increase in July, which was more than double forecasts. The unemployment rate appears to be unchanged at a near record low of 3.5%.
Write to Jacob Sonenshine at firstname.lastname@example.org