The stock market got caught in the perfect storm of escalated trade tensions and impeachment fears in September, but it came out just fine with the S&P 500 eking out a 1.7% gain. October might be a different story.
October has historically been the most volatile month as the Cboe Volatility Index, or the VIX, tends to peak in the month, jumping to more than 21 points on average over the past 30 years, according to Macro Risk Advisors. The market’s surprising resilience in September, which is typically the worst month for stocks, could also signal the rally is about to lose steam.
“We’ve been spoiled by the lack of volatility this month, and it increases the chances of a little more explosive October,” Ryan Detrick, senior market strategist for LPL Financial, told CNBC. “One thing we know is the markets don’t stay calm forever and we’ve seen that multiple times this year.”
There isn’t a lack of catalysts to drive the market crazy, including upcoming trade talks, third-quarter earnings reports and President Donald Trump’s impeachment saga. Over the past 30 years, more than 190 S&P 500 companies have seen a daily move of more than 1% in October, the most companies in any given month, according to Macro Risk Advisors.
Reference: CNBC
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