History reveals September 2020 may be bad for the stock market

August 31, 2020

2 minutes read

red-hot summer months of rallies.

And it won’t be good, in case you are wondering.

^GSPC) has dropped about 1% on average that month since 1950, LPL Financial data shows. The only other month to notch a drop on average (and a minuscule one at that) going back to 1950 is August.

But this time around, September being lackluster for markets could be further solidified because of election-related uncertainty. LPL Financial data reveals that the S&P 500 has shed 0.2% on average in election year. This year stands to be worse — or an outlier for you data fans — given how contentious this election will be and with the COVID-19 pandemic continuing to rage on globally.

And October may flat out stink for markets, too.

LPL Financial says the S&P 500 has dropped nearly 1% in election years dating back to 1950. That makes October the worst month for markets in an election year.

Suffice it to say, most investors are in no way prepared for a cool-down in the markets this year.

The Dow Jones Industrial Average has climbed roughly 8%, on pace for its strongest performance in 36 years. Tech stocks such as Apple (AAPL), Tesla (TSLA), Microsoft (MSFT) and Zoom (ZM) continue to power the market higher with little interest being paid by investors on valuations.

cheap money from the Fed and hopes for a strong 2021 rebound in the U.S. economy as key reasons.

told Yahoo Finance’s The First Trade. “We’re in a recovery. Monetary policy is accommodative. Interest rates will be low indefinitely. Real yields are negative. We have a good demographic wave in this country. I believe this is the next elongated secular bull market.”

Now bring on September …

@BrianSozzi and on LinkedIn.” data-reactid=”31″>Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.