(Bloomberg) — Stocks edged up at the end of a wild August on Wall Street, with investors bracing for what’s historically known as the worst month for equities.
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For all the whiplash in global markets just a few weeks ago, things are looking reasonably calm. Equities saw mild moves on Friday, with the S&P 500 poised for its fourth consecutive monthly gain amid data showing the economy is holding up, while leaving the door open for the Federal Reserve to start cutting rates in September. Whether a jumbo-sized reduction remains on the table, next week’s jobs report might bring some clues.
“As August comes to a close, sentiment has calmed down significantly compared to the beginning of the month,” said Mark Hackett at Nationwide. “Many of the larger concerns in the overall economy have decreased. September may bring some seasonal challenges, but if investors can navigate through them, these challenges can turn into advantages in the fourth quarter.”
Since 1950, the S&P 500 has generated an average loss 0.7% in September and finished higher only 43% of the time, making it the worst month for stocks on an average return and positivity-rate basis, according to Adam Turnquist LPL Financial. The last four Septembers have also been notably weak, with the index posting respective declines of 4.9%, 9.3%, 4.8%, and 3.9%.
“During the month, the index tends to trade sideways during the first half, with losses beginning to accumulate into month end,” he said. “For this year, the midway point also happens to line up closely with the September Fed meeting.”
The S&P 500 rose to around 5,620. Volume was thin ahead of Monday’s US holiday. The Nasdaq 100 added 0.7%. The Russell 2000 of small firms was little changed. Goldman Sachs Group Inc. is planning to cut more than 1,300 employees from its global workforce, the Wall Street Journal reported. Dell Technologies Inc. rallied on solid earnings.
Wall Street’s “fear gauge” — the VIX — dropped to around 15. That’s after an unprecedented spike that took the index above 65 during the…
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