September could be a bumpier month for stocks, if history is any guide.
According to Carson Group’s Ryan Detrick, September is the weakest month of the year for stocks. The S&P 500 (^GSPC) is down 0.6% on average during the pumpkin spice month and generates a positive return only 45% of the time. Along with February, September is the only other month of the year with a negative return on average.
Volatility also tends to spike, with this year’s midterm elections throwing another wrench into things.
But these are just trends, and seasonality isn’t what’s driving markets. While LPL Financial chief technical strategist Adam Turnquist expects more volatility ahead, it could also present some buying opportunities for investors.
“There’s a lot of macro variables right now that I think can fuel upside in volatility,” Turnquist told Yahoo Finance on Monday, citing geopolitical tensions and rising bets of a Fed rate hike.
“The earnings story is great, but we’re not in that chapter right now for the market until we get to the next reporting season,” Turnquist added, “so I do think the setup here, base case, [is] higher volatility and potentially a buying opportunity if we get some drawdown.”