Cruel September
Jack Janasiewicz offers his tactical take on September’s market correction in this podcast recorded on October 5, 2023.
- Seasonality patterns played a role as September is historically one of the worst months for markets.
- Throw in a few concerns about a government shutdown, the UAW strike, and the rise in oil prices, the US dollar and bond yields – and it’s no wonder that risk assets had a difficult month.
- Some of the move in the Treasury bonds may be driven by the market repricing the “higher for longer” outlook as fewer rate cuts are now expected in 2024.
- The US dollar has also been marching steadily higher against most competing currencies since mid-July, further tightening financial conditions.
- As the calendar flips from September to October, some of the seasonal headwinds will be turning to tailwinds – but sentiment is still downright sour and technicals point to an oversold market.
- While this could provide a pretty good setup heading into the final quarter of the year, oil prices, the dollar and bond yields all pose risks to the markets.
- Any sustained and prolonged advance in these three concerns could very well shift the sentiment even more dire.
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