September Market Recap

A confluence of supply chain bottlenecks, fears over the Chinese real estate sector, less accommodative monetary policy, and stickier inflation assumptions are all weighing on growth.  As a result, GDP growth expectations have been marked down for the recent quarter.  The Atlanta Fed’s tracking estimate for 3Q GDP has been steadily declining and now stands at 2.3% vs. 6.1% at the end of July.

However, the demand side of the economy remains strong, which would point to growth having been pushed out into the future due to the recent Delta-fueled surge in Covid cases and current supply chain constraints.  As some of these issues begin to subside the base case of sustainable economic recovery remains viable.

The Stock Market

According to data from Yardeni Research September has historically been the worst month of the year for the market.  Going back to 1928 the S&P 500 declines 51% of the time in the month of September and in the years when it does fall the average decline is 4.6%. The S&P lived up to its reputation again this year. After posting its 54th record high closing price for 2021 to begin the month, the large cap benchmark index went on to post a decline of 4.76% in September. The NASDAQ index fell slightly more, finishing down 5.27% while small-cap and foreign stocks were off by just under 3%. 

While a down month is an unpleasant occurrence, especially when we’ve become somewhat accustomed to a trend that is “up and to the right” it’s important to keep things in context.  The S&P 500 is still up nearly 16% so far in 2021, even with the recent pullback. Additionally, this is only the second time so far this year that we’ve seen a down month, and it brings the peak-to-trough drawdown to 5%. Over the past 41 calendar years, the market has averaged intra-year declines of 14.3%, so a 5% pullback is not unexpected and well within the range of what we would normally expect to see in any given year. 

Fixed Income

Conclusion

Markets have undoubtedly marked-up some of the fears investors are facing today.  However, investing in the markets always has and always will involve facing whatever set of risks are pertinent at the moment.  Some will matter, most will not.  History remains on the side of remaining invested for the long-run and looking past whatever might seem ominous at any given moment in time.

 

Clicking on any links above may result in you leaving the Pittenger & Anderson, Inc. website. The opinions and ideas expressed on these external websites are those of third-party vendors and Pittenger & Anderson, Inc. has not approved or endorsed any of this third-party content. For the full Terms & Conditions of using the Pittenger & Anderson, Inc. website, click on this link.

Pittenger & Anderson, Inc. does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.  Additionally, the information presented here is not intended to be a recommendation to buy or sell any specific security.  To learn more about our firm and investment approach, check out our Form ADV. Past performance does not indicate future results.

Click here to download the PDF version of this article.

Was this post helpful?

Previous

Next

Since 1995, Pittenger & Anderson has guided individuals and families going through money-in-motion events. We are a fee-only Registered Investment Advisor and a full-time fiduciary providing investment management, financial planning, and complimentary services to 700+ clients in over 30 U.S. states.

Get P&A in your inbox!

Get P&A in your inbox!

Our once-a-month email is designed to cover topics that impact your financial life, whether you’re just starting out, mid-career, or enjoying retirement.  Learn about planning opportunities, our thoughts on the markets, and many other empowering topics.  We will never sell or give away your email address, nor will we spam you.  We embrace the Golden Rule.

You have Successfully Subscribed!

DOWNLOAD "5 KEYS TO RETIRING WITH CONFIDENCE" HERE

DOWNLOAD "5 KEYS TO RETIRING WITH CONFIDENCE" HERE

Please enter your name and email below.

You have Successfully Subscribed!

DOWNLOAD "5 KEYS TO RETIRING WITH CONFIDENCE" HERE

DOWNLOAD "5 KEYS TO RETIRING WITH CONFIDENCE" HERE

Please enter your name and email below.

You have Successfully Subscribed!

The Confidence Your Money is Looking For

The Confidence Your Money is Looking For

Please enter your name and email below.

You have Successfully Subscribed!