Yet Another Month of Gains

September 30, 2024

September is historically the most difficult month for stocks and coming off the Labor Day weekend the month began with a technology led decline that resulted in the worst week for the market this year.  However, some took the decline as an opportunity to buy and ignited a technology stock rally that made the second week of the month the best week this year for the market. During the second half of the month encouraging economic reports and a surprisingly strong 50 basis point rate cut by the Federal Reserve fueled buying interest in stocks.  Technology stocks tend to lead the market, both up and down, and positive comments from AI leader Nvidia help encouraging buying in that sector.  The resurgence of interest in technology stocks continued into the final week leaving the S&P 500 with a gain for the month of 2% and the widely followed index is now up 20.8% for the year.  Oil had a volatile months that saw it hit the lowest point this year before closing with a loss of 7% and gold just keeps on climbing, hitting a new all-time high before closing with a gain of 5%.

With the S&P 500 up more than 18% in the first 8 months, we began September with a 4-day week shortened by the Labor Day weekend.  Investors are aware September has historically been a tough month for stocks and it began with a strong selloff in technology stocks that would culminate in the worst week for that sector in over 2 years.  After the tough start there was pressure on the S&P 500 all week that was exacerbated on Friday with the government jobs report showed only 142,000 new jobs were created in August.  The following week began with a “buy the dip” rally.  Positive comments from AI leader Nvidia generated a relief rally in technology stocks that helped them erase most of last week’s declines.  The Presidential debate didn’t seem to move the market, but tech stocks continued to rally helping the S&P 500 post its best week this year.  The highlight of the 3rd full week was the Federal Reserve open market committee deciding to lower interest rates by an aggressive 50 basis points and the market liked that news sending the S&P 500 1.4% higher on the week.  Good economic numbers including a report the Federal Reserve’s favorite inflation indicator, the Personal Consumption Expenditure Index, showed the lowest year over year gain since early 2021.  The week ended with a S&P 500 up another .6%.

October has a bad reputation as it has been home to 3 of the worst stock market crashes in history.  Despite the reputation, it has traditionally been a very average month with a typical gain of .6% and a higher close 60% of the time.  The market is currently enjoying a Goldilocks scenario with solid economic growth, good earnings, low inflation, and declining interest rates.  No wonder we have regularly been hitting new all-time highs for the S&P 500 this year.  With that said, market valuation is currently near the highest level it has ever been during an economic expansion and a 5% to 10% pullback would be healthy.  In late August we put some defensive measures in place and will leave them for most of October.  We have been slow to allocate new money that has come to us and have taken profits in areas that have become frothy.  Barring some headline making event we wouldn’t expect a significant decline but want to be cautious in the near term.

If you know someone who would be interested in learning more about Greenberg Financial Group, please contact us at 520-544-4909, or visit our website at www.greenbergfinancial.com. As always, the key to successful investing is to have a portfolio that is consistent with your investment objectives and risk tolerance. We invite you to listen to our weekly Money Matters radio show which airs every Sunday Morning from 8:00 AM to 10:00 AM on KNST AM 790.  You can also listen to us on iHeart radio, follow us on Twitter @gbergfinancial or on Facebook under Greenberg Financial Group.  Previous radio shows are available by going to www.iheart.com or using the iHeart app and typing Money Matters with Dean Greenberg.