Wall Street has had its worst September in twenty years. The collapse of shares on the New York Stock Exchange in the range of 8.8 to 10.5 percent is remembered only by investors who traded on it as early as 2002. But October gives hope for a turnaround.
The S&P 500 lost nearly 9.5 percent during September, the Dow Jones lost nearly nine percent, and the tech-heavy Nasdaq plunged 10.5 percent. So the question is whether the established trend will continue in October, or whether investors can look forward to better times.
In the past, October stocks have risen
History gives hope for improvement in the following month. In nearly 55 percent of the cases where a decline of more than seven percent occurred in September, stocks rose in October. And by an average of 0.53 percent, the median increase is even 1.81 percent. If stocks fell in September no matter how, in October growth occurred in more than 57 percent of cases. On average, Wall Street improved by 0.47, the median by 1.03 percent, according to the Marketwatch.com analysis.
The Fed poses a threat to stocks
But the risk is the policy of the American central bank, which can destroy the October hope. If the Fed continues to rapidly raise interest rates (it has raised 0.75 percentage points three times in a row so far), stocks are going to have a really tough time in October.
