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This Week’s Market Outlook… 📊

If you are listening to an investing podcast or watching CNBC, you may hear someone talk about September having “negative seasonality.” When someone refers to market “seasonality,” they are talking about patterns the stock market tends to exhibit during a certain month or period of time throughout the year.

Historically, seasonality weakens in September and usually continues to show weakness through October. Looking at stock market returns over the last 98 years, September is the only month that has averaged a negative return.

I wrote a piece on this last year, and the reaction in the market was quite different from historical norms. We started September with a steep decline, but ended the month up 2 percent on the S&P 500.

This year, the market has rallied more than 10 percent as investors price in the AI trade and deregulation out of Washington. However, this rally has not withstood volatility. In April we saw a 20 percent drop due to tariffs, followed by a complete V-shaped rebound. The market is now at all time highs.

As we head into this September, many investors believe the classic negative trend is setting in. The market has rallied nearly 30 percent since April with almost no pullback, which has turned sentiment more cautious.

To me, this near term negative stance makes sense. We are entering what are historically the two worst months for the market, and I do not see many catalysts on the horizon to push prices higher.

If we do see a pullback over the next month or so, I believe it will present incredible buying opportunities. The market stands around 6,500 today, and I expect it to finish the year at least near 6,700. If we get a short term correction, do not panic, look for companies you want to own.

I hope you had a great Labor Day and wish you a great week ahead.

Top ETFs on our Radar… 📈

The iShares Expanded Tech-Software Sector ETF has performed exceptionally well this year. Software companies have shown strong performance as investors seek to identify the next big winner in AI.

Tune in every Monday and Friday for in-depth Market Analysis, Recaps, and a featured Stock & ETF.

Thanks for reading and have a great week!

-Ryan

@Theinvestingauthority