{"id":985095,"date":"2018-09-05T18:59:05","date_gmt":"2018-09-05T18:59:05","guid":{"rendered":"https:\/\/juniorminingnews.com\/?p=985095"},"modified":"2018-09-05T18:59:05","modified_gmt":"2018-09-05T18:59:05","slug":"exposed-the-september-effect-2","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=985095","title":{"rendered":"Exposed: The \u201cSeptember Effect\u201d"},"content":{"rendered":"

By Brian Maher<\/a><\/span> <\/p>\n

\"Chart\"<\/a><\/div>\n

This post Exposed: The \u201cSeptember Effect\u201d<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

September is officially in swing.<\/p>\n

America’s youth are back at their desks; its adults are back at the grindstone.<\/p>\n

Here in Baltimore, a late-summer heat wave has us in siege\u2026 like a fever that won’t let go.<\/p>\n

Marketwise, many consider September a calm before dreaded October.<\/p>\n

The Panic of 1907\u2026 the Crash of 1929\u2026 \u201cBlack Monday\u201d 1987 \u2014 all fell in October.<\/p>\n

October’s record is so felonious that market observers have fashioned a term for it \u2014 the \u201cOctober effect.\u201d<\/p>\n

But is it true? Is October worthy of its blackened name?<\/p>\n

Today we haul the defendant into the dock\u2026 interrogate its record\u2026 and announce a verdict.<\/p>\n

But let us first look in on today’s proceedings\u2026<\/p>\n

Stocks were \u201cmixed\u201d today, as the phrase has it.<\/p>\n

The Nasdaq was down 96 points.<\/p>\n

Why?<\/p>\n

Twitter CEO Jack Dorsey and Facebook COO Sheryl Sandberg appeared before Congress today.<\/p>\n

There they got a good grilling about foreign election meddling and their efforts against it.<\/p>\n

\u201cWhen you have these corporate executives dragged to Congress,\u201d says Robert Pavlik, chief strategist at SlateStone Wealth, \u201cthat makes the market more nervous.\u201d<\/p>\n

The S&P was down eight points today\u2026 while the Dow Jones worked a 22-point gain.<\/p>\n

But returning to the question of the hour\u2026 is October the great menace we’ve all been led to believe?<\/p>\n

History says\u2026 no.<\/em><\/p>\n

October’s bankrupt reputation appears more a string of sour luck; its conviction based on circumstantial evidence.<\/p>\n

Stephen Williamson, former vice president of the St. Louis Fed:<\/p>\n

Stock market crashes have occurred sufficiently infrequently in history that there is not enough evidence on when they are more likely to occur.<\/em><\/p>\n

In further vindication of October, the folks at Yardeni Research prove the average October market return is a positive 0.4%.<\/p>\n

A slender gain \u2014 but a gain.<\/p>\n

Meantime, Investopedia informs us that more bear markets have ended<\/em> in October than begun in October.<\/p>\n

Downturns in 1987, 1990, 2001 and 2002 \u2014 all reversed in the year’s tenth month.<\/p>\n

We must conclude an innocent man has been pitched into infamy\u2026 and sent to the gallows on false charges.<\/p>\n

But if October isn’t the menace many believe, does another month rise in its place?<\/p>\n

Yes. Which month?<\/p>\n

September <\/em>\u2014 this month.<\/p>\n

\u201cSince the Dow Jones industrial average was created in the late 1890s,\u201d financial columnist Mark Hulbert notes, \u201cSeptember has produced an average loss of 1.1%.<\/p>\n

\u201cThe 11 other months of the calendar,\u201d Hulbert adds, \u201chave produced an average gain<\/em> of 0.8%.\u201d<\/p>\n

One or two renegade Septembers alone cannot account for its villainous record, says Hulbert:<\/p>\n

\u201cOn the contrary, the month has an impressively consistent record at or near the bottom of the rankings.\u201d<\/p>\n

Like the Dow Jones, September’s ill luck covers the S&P.<\/p>\n

Bank of America Merrill Lynch strategist Savita Subramanian has examined the S&P’s median September return since 1928.<\/p>\n

The results were damning.<\/p>\n

The evidence \u2014 the damning evidence, smoke billowing from the gun barrel:<\/p>\n<\/p>\n

October is a month of honey in comparison.<\/p>\n

Perhaps it is time to replace the \u201cOctober effect\u201d with the more deserving \u201cSeptember effect\u201d?<\/p>\n

But no more talk of Septembers past.<\/p>\n

What about September present?<\/p>\n

After closing August at or near record highs, stocks have entered September with a slight limp.<\/p>\n

Of course\u2026 we are not one week into the month.<\/p>\n

But if history is a reliable barometer, watch out for the next three weeks\u2026<\/p>\n

North Korea appears to be playing with firecrackers again.<\/p>\n

An emerging-markets crisis issuing out of Turkey remains a possibility.<\/p>\n

There are trade wars to consider.<\/p>\n

Meantime, stocks are wildly overvalued on key historical metrics.<\/p>\n

Mix the ingredients and markets are becoming \u201cincreasingly fragile,\u201d says our own Nomi Prins:<\/p>\n

\n

Uncertainty will be a big factor in markets and economies through autumn\u2026<\/em><\/p>\n

Given the rise in uneven patterns globally, it is clear that markets are entering an increasingly fragile period. Expect rising volatility this fall to become central to even the mainstream financial media outlets.<\/em><\/p>\n<\/blockquote>\n

Words to the wise, perhaps \u2014 for the wise.<\/p>\n

Do we hazard our own prediction of September doom?<\/p>\n

Of course not.<\/p>\n

Here at The Daily Reckoning<\/em>, our curiosity is strong\u2026 but our commitments weak.<\/p>\n

\u201cSometimes right, sometimes wrong and always in doubt, we just try to connect the dots,\u201d in the words of our co-founder Bill Bonner.<\/p>\n

We have even suggested markets could \u201cmelt up\u201d from here \u2014 before melting down sometime next year or the year after.<\/p>\n

We are nonetheless under bonds to remind you\u2026<\/p>\n

September is one of the most dangerous months to speculate in stocks.<\/p>\n

Along with, as the great scalawag Mark Twain said:<\/p>\n

July, January, April, November, May, March, October, June, December, August \u2014 and February.<\/p>\n

Regards,<\/p>\n

Brian Maher
\nManaging editor, The Daily Reckoning<\/em><\/p>\n

The post Exposed: The \u201cSeptember Effect\u201d<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

…read more<\/a> <\/p>\n

From:: Daily Reckoning<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By Brian Maher This post Exposed: The \u201cSeptember Effect\u201d appeared first on Daily Reckoning. September is officially in swing. America’s youth are back at their desks; its adults are back at the grindstone. Here in Baltimore, a late-summer heat wave has us in siege\u2026 like a fever that won’t let go. Marketwise, many consider September […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[366],"tags":[],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/985095"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=985095"}],"version-history":[{"count":0,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/985095\/revisions"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=985095"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=985095"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=985095"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}