Markets appear to have lost their inner Zen once again as we head into the final months of the year. We find it rather interesting how this seems to play out every autumn with September being the weakest month on average since 1950.
In can be a particularly cruel month coming off a strong August: According to LPL Research, the last two times we saw gains of more than five per cent in August were 1986 and 2000, and the S&P 500 went on to lose 8.5 per cent and 5.4 per cent, respectively, the following month.
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Markets have been exhibiting similar weakness this September. So far the S&P/TSX is now down nearly 6 per cent from its August highs, pushing it back to beginning of June levels, while the tech-heavy S&P 500 has given up 10 per cent over the same period. As a result, the TSX is down 7.5 per cent this year-to-date while the S&P 500 is now down nearly one per cent sending it below its 50-day moving average for the first time in five months.