WEEKLY MARKET UPDATE 10/4/2024

Despite rising geopolitical tensions, the East Coast port strike, seasonal headwinds, Hurricane Helene, and political uncertainty, stocks impressively finished the week slightly higher.  Stocks seemed poised to finish the week lower, but rallied into the weekend as Friday’s jobs report for September was notably strong and US dockworkers agreed to suspend their port strike until mid-January.  Nonetheless, with the S&P 500 less than 1% below all-time highs and up 10 of the last 11 months, some caution might be warranted in the short-term, as October tends to be weak during election years (per Carson Investment Research) and markets brace for Israel’s potential response to Iran’s recent attack as we head into the one-year anniversary of the October 7th Hamas terrorist attack.  Next week we will also receive the consumer price index (CPI) for September on Thursday.

SELL ROSH HASHANAH, BUY YOM KIPPUR

We have highlighted this old market adage in the past, but with Rosh Hashanah, the Jewish New Year, starting on the evening of October 2nd and Yom Kippur beginning at sundown Friday, October 11th, we wanted to revisit this seasonal pattern.  Per data from AlmanacTrader, since 1971 the S&P 500 has fallen over 58% of the time and on average -0.4% between these two holidays.  However, while this period is historically difficult, longer-term returns are favorable, as Yom Kippur to Passover (next year it falls on April 12th) has seen the S&P 500 rise over 70% of the time for an average gain of 6.7% (see table below).

Ian G. Browning, CFA
Managing Director, Investment Strategies | Shareholder

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