Stock Market Outlook for September 1, 2021
Over the past 20 years, the S&P 500 Index has averaged a loss of 0.8% in September with a large dispersion of results around the mean.
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*** Stocks highlighted are for information purposes only and should not be considered as advice to purchase or to sell mentioned securities.  As always, the use of technical and fundamental analysis is encouraged in order to fine tune entry and exit points to average seasonal trends.
Stocks Entering Period of Seasonal Strength Today:
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Cisco Systems, Inc. (NASD:CSCO) Seasonal Chart
The Travelers Cos., Inc. (NYSE:TRV) Seasonal Chart
JetBlue Airways Corp. (NASD:JBLU) Seasonal Chart
Msc Industrial Direct Co. (NYSE:MSM) Seasonal Chart
NetScout Systems, Inc. (NASD:NTCT) Seasonal Chart
Chatham Lodging Trust (NYSE:CLDT) Seasonal Chart
S&T Bancorp, Inc. (NASD:STBA) Seasonal Chart
China Life Insurance Co. Ltd. (NYSE:LFC) Seasonal Chart
Kimball Intl, Inc. (NASD:KBAL) Seasonal Chart
First Trust Multi Cap Value AlphaDEX Fund (NASD:FAB) Seasonal Chart
Cronos Group, Inc. (TSE:CRON.TO) Seasonal Chart
First Asset US & Canada Lifeco Income ETF (TSE:FLI.TO) Seasonal Chart
Deutsche X-trackers MSCI Japan Hedged Equity ETF (NYSE:DBJP) Seasonal Chart
ProShares S&P MidCap 400 Dividend Aristocrats ETF (NYSE:REGL) Seasonal Chart
Schwab U.S. Large-Cap Value ETF (NYSE:SCHV) Seasonal Chart
ProShares Russell 2000 Dividend Growers ETF (NYSE:SMDV) Seasonal Chart
SPDR MSCI ACWI IMI ETF (AMEX:SPGM) Seasonal Chart
Invesco S&P 500 High Dividend Low Volatility ETF (AMEX:SPHD) Seasonal Chart
Vanguard High Dividend Yield ETF (NYSE:VYM) Seasonal Chart
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The Markets
Stocks traded mixed on Tuesday as investors conducted their final trades before the end of the month. The S&P 500 Index slipped by just over a tenth of one percent, peeling back slightly from the record high charted in the previous session. The benchmark continues to battle around the mid-point to the approximately 200-point trading range that hovers between 4400 and 4600. Intermediate support at the rising 50-day moving average remains solid. MACD, while still showing characteristics of a bullish trend, continues to negatively diverge from price, indicative of waning buying demand.
Today, in our Market Outlook to subscribers, we discuss the following:
- A look at the monthly chart of the large-cap benchmark
- Average tendency for the S&P 500 Index in September
- Securities that have gained in each September over their trading history
- The trend of home prices in the US and what it implies for the strength of the economy
- Canadian GDP: What is driving the performance and what it says about what to expect for the health of the economy through the end of the year.
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For the month ahead, the large-cap benchmark has struggled in its last month of the third quarter, producing an average loss of 0.8% over the past 20 years. September has historically been the weakest month of the year amidst the period of volatility for stocks that has produced a wide range of results. The weakest September performance in the past two decades was in 2002 when the benchmark dropped by 11.0% amidst the recession that followed the Tech bubble, while the best September performance was realized in 2010 amidst the rebound from the recession attributed to the Great Financial Crisis. Obviously the comparison to these recessionary/post-recessionary periods are difficult to make given that the economy is quite strong and the market has already rebounded substantially from the lows charted in March of 2020. It is fair to say that, barring some catalyst to the contrary, a result around the average change for this last month of the third quarter is a reasonable bet as normal September volatility keeps investors on edge as they return to work and school. We break down everything to expect in the month(s) ahead in our monthly report to subscribers that was just released on Tuesday.
Just Released…
Our monthly report for September is out and it’s a long one. At 116 pages, this is our largest report yet.
Highlights in this report include:
- Equity market tendencies in the month of September
- Price of Copper hinting of the cooling of the growth in the economy
- The decline in the price of oil
- The currency impact: US and Canadian Dollars
- The seasonal trade in Natural Gas
- The willingness of consumers to spend
- The Retail Industry
- Consumer sentiment
- Bond market regaining levels of long-term support
- Emerging markets
- Strong demand for vehicles, look towards these stocks
- The encouraging signal that suggests homebuilders are moving past supply chain backlogs that burdened them this spring
- The strength of industrial production
- How are the manufacturers feeling about their prospects ahead?
- Shipping demand and the period of seasonal strength for the transportation sector
- Investment services: A hedge against volatility?
- Seasonal play in agriculture stocks
- The second of the weakest two-week spans in the equity market
- The technical status of the S&P 500 Index
- What the technical indicators are saying about breadth
- Positioning for the months ahead
- Sector reviews and ratings
- Stocks that have frequently gained in the month of September
- Notable stocks and ETFs entering their period of strength in September
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With the new month now upon us and as we celebrate the release of our monthly report for September, today we release our screen of all of the stocks that have gained in every September over their trading history. While we at Equity Clock focus on a three-pronged approach (seasonal, technical, and fundamental analysis) to gain exposure to areas of the market that typically perform well over intermediate (2 to 6 months) timeframes, we know that stocks that have a 100% frequency of success for a particular month is generally of interest to those pursuing a seasonal investment strategy. Below are the results:
And how about those securities that have never gained in this ninth month of the year, here they are:
*Note: None of the results highlighted above have the 20 years of data that we like to see in order to accurately gauge the annual recurring, seasonal influences impacting an investment, therefore the reliability of the results should be questioned. We present the above list as an example of how our downloadable spreadsheet available to yearly subscribers can be filtered.
Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.89.
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Seasonal charts of companies reporting earnings today:
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S&P 500 Index
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TSE Composite
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