When markets open up on Tuesda, it will be October. Notably, Chinese markets will be open Monday as the Chinese Communist Party celebrates 75 years in power. From there, Chinese equity markets will be closed for the remainder of the week.
That's an important detail because China has been rolling out stimulus measures and leaks about further stimulus measures. That turn had goosed risk assets this week and led to a 10% rally in Chinese equities in the best 4-day stretch since 2020.
Looking back at September, the month initially followed the seasonal pattern of equity market weakness perfectly. After peaking on the final trading day of August, the S&P 500 fell 3.3% on September 11. From there though, the market fell in love with the idea of a 50 basis point Fed cut and Powell delivered. That led to a strong rally in the back half of the month to new all-time highs.
Outside of stocks, it wasn't great but there was some success. Gold is generally weak in September and the strength instead I take it as yet-another sign of underlying demand for gold. Oil did follow the script as it's a September dog and fell nearly 10%.
The good news is that it's all about to change.
October is a positive month for most risk assets and the start of a nice two-month trend for global equities.
- Fourth best month for the S&P 500
- Third best month for the Nasdaq
- Second best month for the MSCI World Index
- 10-year Treasury yields rise more in Oct than another other month
- Third-best month for AUD
- Third-weakest month for EUR
- Weakest month of the year for oil
Note that the S&P 500 comes into October on a five-month winning streak and up in 10 of the past 11 months.
