The S&P just closed the door on yet another positive quarter — and now it’s the fourth quarter’s turn to deliver. If history is any indication, deliver it should. After all, the last three months of the year have averaged a gain of almost 4% over the past 70 years.
Recently, the outperformance has been even more pronounced. The October-December stretch has set the pace with gains, on average, of almost 7% since 2009, according to Bloomberg. That’s more than twice as strong as any other quarter.
The seasonal winds are clearly blowing north.
Then again, Donald Trump wasn’t running for president in any of those quarters, so that’s a wild card nobody could possibly handicap in the next couple months. That, of course, won’t stop the pros from trying. The Wall Street consensus is calling for a weak finish to 2016 for the S&P, with analysts proving a bit more gloomy than usual.
Barry Rithholtz of the Big Picture blog breaks from the pack on that assessment. His take: All the negativity is baked in at these levels.
“The unusually bearish demeanor from the normally cheerful analysts on the street of dreams might be the single-most useful piece of news about equity markets I have seen this month,” he says.
In addition to all the political nonsense, there’s plenty of other stuff to mess with the market’s upward tendency these days. The jobs report is the biggie at the end of the week, with auto sales and manufacturing data serving as appetizers on a fairly packed economic menu. These are on top of the Deutsche Bank woes that hang over markets.