The S&P 500 (SPX) has made eight new record highs in September after clinching five in August. That comes despite September historically being the worst-performing month of the year during the past 10 years, 20 years, and since 1950. So, what comes next?
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When the market makes at least one new all-time high in September, it trades higher in October 63.6% of the time with an average return of 0.8%, according to Carson Group. The returns for the fourth quarter in this scenario are even better, trading higher 90.9% of the time with an average return of 4.7%.
S&P 500 Strength Suggests Higher Returns Ahead
Carson Group also notes that the S&P 500 is set to secure a five-month winning streak if September closes in the green. When this occurs, the benchmark index has an average one-month return of 0.8%, a three month return of 2.7%, and a 12-month return of 12.6%.
The data shows that while September’s strength may be unusual, history suggests that further near-term gains are a likely possibility.
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