To The Moon

History has taught the market that September is typically the worst month of the year for U.S. stocks — the S&P 500 has lost an average of 1% in September since 1928.

Now, September 2022 has entered the second half of the year, and the $S&P 500(.SPX)$ has also “lived up to expectations”, down more than 1% so far this month.

Bank of America analyst Michael Hartnett, the most accurate predictor of the trend of U.S. stocks so far this year, said that the current pain in U.S. stocks is not over, and U.S. stocks are expected to fall until October.

Earlier in the year, the analyst said this year's bear market would end in October, with a minimum of 3,000 for the $S&P 500(.SPX)$

The view is also trending in line with a recent Bank of America report on the seasonality trend of the S&P 500.

Stephen Suttmeier research strategist at Bank of America technical pointed out in a recent research note that seasonal data going back to 1928 shows that trends tend to be weaker in the second half of each month than in the first half of every month except December.

Suttmeier pointed out in the report: According to data, the last 10 trading days of September are often more dangerous, and investors are likely to usher in bargain-hunting opportunities in the next October.

Historical data shows that September is also the only month in a 12-month period in which both the average and median returns are negative for the ten trading days at the beginning of the month and the ten trading days at the end of the month. Data also shows that the average $S&P 500(.SPX)$ lost more than 1% in the last ten trading days of September.

If you look at the average $S&P 500(.SPX)$ change for each day of the month, the second half of September was even worse.

A seemingly unbroken sea of red stands out in the second half of September.

In addition to historical factors, Bank of America also highlighted a range of other technical factors in the report that will negatively affect U.S. stocks.

The three major U.S. stock indexes fell on Tuesday as investors prepared for the upcoming Federal Reserve meeting on interest rates. BlackRock, the world's largest asset management company, said that U.S. stocks and U.S. bonds will continue to increase volatility in the future, and investors need to continue to consider reducing asset portfolio risks.

Economist Nouriel Roubini, better known as “Doctor Doom” – the prophet of torment or Dr. Apocalypse’ – Having predicted the housing crash of 2007 and the subsequent financial crisis of 2008, he said a few days ago that by the end of this year, there will be a "long and ugly" recession in the U.S. and around the world. The $S&P 500(.SPX)$ will fall sharply throughout next year.

Doomsday Dr. Roubini believes that the Fed cannot both bring inflation down to the target and avoid a hard landing; once the world falls into a recession, there will be no fiscal stimulus, because debt-ridden governments have run out of fiscal bullets, and there will be a situation similar to that of the 1970s stagflation.

Even happened a flat, ordinary recession, the $S&P 500(.SPX)$ could fall by 30%, or 40% in the event of a true hard landing.

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