SMM: despite the continued impact of the novel coronavirus epidemic, U. S. stocks still achieved their best August performance in more than 30 years, with all three major stock indexes performing strongly. But as the US presidential election approaches, the likelihood of market turmoil will greatly increase, with September and October likely to be the most volatile two months.
Fund managers and strategists have repeatedly warned that Thursday's fall in US stocks could herald turmoil over the next two months as institutional investors begin to refocus on potential economic dangers in the coming year. On Thursday, the s & p 500 fell sharply, a rare drop since the start of the summer, falling 3.5% as investors dumped technology stocks, bringing the market panic indicator close to a 10-week high.
Historically, trading volume and information volume in summer have been very low. It's the same this year, "says Jonathan Treussard, a partner at Research Affiliates, the asset manager." I can assume that after the tiredness of the first half of this year, I'm starting to get serious again. "
Judging by history, the s & p has fallen by an average of 0.5% in September since 1944, and the average decline has been the same in each election year during that period, according to CFRA, a research firm. The biggest average declines were in cyclical stocks, including auto parts, steel and semiconductors. The best-performing months were April and December.
The agency's data also show that the s & p and Russell 2000 fell 21.8 per cent and 30.8 per cent respectively in 1987 (the u.s. stock market crash), the biggest drop in history in October.
Sam Stovall, chief investment strategist at CFRA, said that as the S & P; approached its highest valuation since the tech boom in the late 1990s, the collapse of negotiations between Democrats in Congress and the White House on another economic stimulus bill could further increase volatility.
House Speaker Nancy Pelosi said last Tuesday that there are still "serious differences" between Democrats and the White House on the novel coronavirus epidemic relief bill.
Charlie Ripley, a senior investment strategist at Allianz investment management company (Allianz investment Management), also warned that the gains of a small number of technology stocks, such as Apple and Amazon, were too concentrated and that "the risk of a sharp fall in the stock market is bound to increase as the uncertainty of the presidential election increases."
"the stock market is close to an all-time high, so things will get worse soon." He added: "due to delays in mailing the vote count, the presidential election may even bring volatility to the market after Election Day."
In addition, one of the key events that investors should pay attention to this month is the Fed's policy meeting on September 16, which will discuss possible further measures to support the economy. It was also the Fed's last meeting before the November election.
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