Return is tough for equity investors, the CAC 40 tumbles nearly 2% around 4.15pm. And more pain for this month of September it is far from excluded. It must be said that “historically, the month we are entering is on average the worst in 30 years”, observes John Plassard, investment specialist at Mirabaud Securities, on the Bloomberg database since 1992 relating to the major equity indices (Stoxx 600 for Europe and Nasdaq, Dow Jones and S&P 500 for Wall Street, in the US, see chart below).
In Europe it is by far the month of September that the average performance of equities is the worst, ahead of June and August, also historically negative, whilein reverse, the 7 months from October to April inclusive are generally the most favorable. And if we study the average monthly performance of the stock market over a longer period, for example between 1950 and 2020, the CAC 40 lost more than 0.5% on average in September, as Eric Galiègue noted last yearpresident of Valquant Expertyse (on the Valquant Expertyse and Factset database; the CAC 40 has only existed since 1988, the calculations are based on a “reconstituted” index, earlier this year), interviewed by Capital.
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How to explain the poor historical performance in September ? It usually corresponds to the disappointments experienced by equity investors, then faced with a less favorable reality than that hoped for in the first eight months of the year, says the expert from Valquant Expertyse.
CAC 40, Wall Street … “the stock market is destined for a lasting collapse!”
However, this year many observers agree that financial analysts expect too high profits for listed companies, given the purchasing power of households at half-auction in a context of historical inflation, high risks of recession and the impact on higher margins were energy prices and the aggressive hike in key rates by the ECB and the Fed.
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Ultimately, September should turn out to be a volatile and turbulent month, following the increase in risk aversion in equity markets seen since mid-August. Caution…
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