S&P 500: September's 'Worst 9 Days' Are Coming...Wall Street: "Forget About a Rebound"

▲ U.S. stock market, bear market/AI generated image

As the U.S. stock market enters its worst seasonal period in September, Wall Street has issued a warning to further reduce equity exposure.

According to MarketWatch on September 3 (local time), the U.S. stock market is exposed to seasonal weakness for nine days between Rosh Hashanah and Yom Kippur, which runs from the 11th to the 20th. Historically, the average daily stock return during this period has been lower than the overall September average. September itself is considered the month with the weakest average annual returns.

For a long time, the Wall Street adage, “Sell on Rosh Hashanah and buy on Yom Kippur,” has been passed down. This phrase reflects the tendency for stock prices to weaken as trading volume decreases more than usual between the two holidays. MarketWatch reported that this phenomenon of decreased trading volume has been observed for over 100 years and confirmed by several academic studies.

Doug Kass, hedge fund manager at Seabreeze Partners, argued that only half of the adage should be followed this year. Kass advised, “Sell on Rosh Hashanah.” He then stated that instead of buying again after Yom Kippur, investors should further reduce their equity exposure.

Kass said, “Rising global interest rates, ongoing conflict in Iran, persistent inflation, and slowing global economic growth have become a toxic combination for U.S. stocks recently.” He cited inflation, government debt, and fiscal deficits as the backdrop for rising global interest rates. The potential for the Iran conflict to drive up international oil prices and further increase price burdens was also cited as a risk factor.

The relative attractiveness of stocks was also presented as a warning sign. Kass said, “The equity risk premium has continued to shrink for a year, and stock price levels are still within the top 10% range of the past.” He added, “The outlook for stocks continues to be problematic.” MarketWatch reported that as the traditional September weakness coincides with seasonal sluggishness after Rosh Hashanah, conservative investors may maintain reduced equity exposure even after Yom Kippur ends.

[Article Summary]

-The U.S. stock market enters a seasonally weak period from September 11 to 20, during which returns have historically been lower than the September average.

-Doug Kass argued, “Sell on Rosh Hashanah,” and stated that equity exposure should be further reduced even after Yom Kippur.

-Rising global interest rates, the Iran conflict, inflation, economic slowdown, and high stock price levels were identified as key burdens for the U.S. stock market.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*