Record-Breaking Year for S&P 500

In the face of economic data that suggests a slow down, the stock market has soared in 2024. At the time of this recording, the S&P 500 Index is up more than 20% year-to-date, and has marked 39 all-time highs since the start of the year.

There is certainly investor optimism over Artificial Intelligence, and for a soft landing for the economy, as the Federal Reserve begins to lower interest rates.

Historical September Performance: Defying Expectations

First of all, September has been better than usual. The ninth month of the year is usually the weakest for stocks, but the S&P 500 is up 1.2% at the time of this recording, with less than 4 trading days left in the month. Since 1950, the September average has been negative, and it’s been pretty significantly negative in the past four years.

The Index hit an all-time high on September 19th, the day the Fed cut interest rates by a half-percent. That’s rare air.

Take a look at this list from LPL Research, showing the total number of record highs hit per month.

September has the fewest with 90, barely edged out by October with only 96, and August with 97.

Q4 Predictions: Historical Data and Market Trends

So, what do we know about stock market performance when there’s all-time high set in September? LPL tells us the market is positive 91.3% of the time in the 4th quarter, with an average return of 4.8%.

Let’s go beyond September. What about when the market has been positive for the first 3 quarters of the year? Over the last 75 years, the final three months of the year have resulted in negative returns only 8 times.
Here’s a chart that ranks the first 3 quarters of the year into quintiles.

Remember, this year, the Index is up 20%, placing it in the top quintile, which is up 16.4% or better. In that quintile, the Index was positive 80% of the time in the final 3 months, and up on average 3.5%.

It is worth noting that the 3.5% is the lowest on the chart. The Index has historically done better in Q4, if the first three quarters were not up as high.

Key Takeaways and Investment Considerations

A couple of takeaways to wrap up. This data does not take into consideration election years. While that ultimately may not make a difference on the returns for the 4th quarter, it may make it a bumpier ride. We do believe investors should brace for increased volatility in the weeks leading up to the election.

Overall though, there is strong momentum building because of investor sentiment of a soft-landing and continued earnings growth.

A reminder the S&P 500 Index is unmanaged and cannot be invested into directly.

The opinions voiced in this video and blog are for general information only and are not intended to provide specific advice or recommendations for any individual.

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Independent Advisor Alliance. Independent Advisor Alliance and GenWealth Financial Advisors are separate entities from LPL Financial.