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Historically, Stock Market Suffers Worst 10-Day Stretch of the Year

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Stock Market Enters Historically Worst 10-Day Stretch of the Year

According to Bank of America, the stock market has entered its historically worst seasonal stretch of days for the year. Stephen Suttmeier, technical research strategist for Bank of America, noted that the last 10 days of September have historically been challenging for the S&P 500, with the index showing positive returns only 40% of the time and an average return of -1.11%. The S&P 500 has already reflected this trend, experiencing a decline of about 0.6% this week. Alongside the usual seasonal tendencies, investors are also facing additional factors that contribute to market volatility.

Factors Contributing to Market Volatility

Goldman Sachs highlighted the volatility typically observed from now until October, as company managements provide updates on the full year with the third quarter coming to a close. These early warnings can often be negative, adding to market uncertainty. Furthermore, investors are awaiting a crucial Federal Reserve update, with the central bank grappling with high inflation and a slowing economy. Worker stoppages, higher oil prices, and the possibility of a government shutdown are also factors troubling investors.

Market Outlook and Key Support Levels

Despite the potential challenges during this period, the Bank of America technical analyst remains overall bullish, as long as any pullback does not break key support levels. The market benchmark, currently around 4,425, is still well above its 200-week moving average of 3,914, indicating a "secularly bullish" trend, according to Suttmeier. In conclusion, the stock market has entered its historically worst 10-day stretch of the year, according to Bank of America. Investors are facing not only the typical seasonal tendencies but also additional factors contributing to market volatility. The outlook remains cautiously optimistic, with the technical analyst maintaining a bullish stance as long as key support levels are maintained. As the market navigates this challenging period, investors will closely monitor developments and adjust their strategies accordingly.

A Hot Take: Implications for New Businesses

The stock market's historically worst 10-day stretch presents both challenges and opportunities for new businesses. Understanding these market dynamics can help businesses navigate this period and potentially leverage it to their advantage.

Understanding Market Volatility

For new businesses, understanding the factors contributing to market volatility is crucial. This knowledge can help them anticipate potential impacts on their operations and finances. For instance, a volatile market could affect investor confidence and funding opportunities for startups.
Strategic Planning and Risk Management
This period also underscores the importance of strategic planning and risk management. New businesses must be prepared to respond to market fluctuations and have contingency plans in place. This could involve diversifying revenue streams, managing cash flows effectively, and maintaining a flexible business model. In conclusion, the stock market's historically worst 10-day stretch can have significant implications for new businesses. While it presents challenges, it also offers opportunities for businesses that can effectively navigate market volatility. By understanding the factors driving this volatility and implementing strategic planning and risk management measures, new businesses can position themselves to weather this period and potentially emerge stronger.
Story First Published at: https://www.cnbc.com/2023/09/19/stock-market-entering-worst-10-day-stretch-of-the-year-historically.html
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