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S&P500; and historical observations

There is a core market principle “history repeats”. Analysts investigate history of one or another asset to find similar moments to a current situation. Today this interest fell on S&P500 index.


Looking at the history of this index, it can be noticed that there are only 38% of S&P500 growth since 1945. In other cases trading session has closed on 30 September with fall. It used to be historically that September was always painful for investors, and the last day was a headshot. Given table shows the most negative days since 1945, where 30 September is a leader.  


Another observation concerning September is that three last weeks of this month are the most negative, according to the historical tendency since 1950.


Current year shows the same situation. S&P500 has been showing positive dynamics only during the first week of September. Losses of the last week reached 2.3%. This tendency may lead to the worst results since 5.8% losses in August. October begins this Friday, which means that employment rates will be released. Despite the fact that Fed’s rhetoric is focused on inflation and external risks such as China or markets, employment is very difficult index. Unemployment rate steadily declines, but creation of new jobs shows unsatisfactory dynamics. According to analysts, cut of unemployment rate is not an achievement, but a decrease of work-aged people.  


Forecasts about S&P500 have no optimism. Revised data show that by the end of 2015 it is expected decline to 2,000 basis points against previous 2,100. The reasons are unsatisfactory indexes of the US economic growth, problems and slowdown of China’s economy, fall of oil prices.