A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link. Wall Street finally has the calendar on its side again. The US stock market tends to be volatile during the late summer months, due to a lull in economic news and earnings to catalyze a rally. Investors also take off for vacation then, resulting in lower volumes and thus choppier trading.
The S&P 500 has gained an average 6.7% from November to April since 1990, according to CFRA data. Of course, history is merely a guide, not a crystal ball into the future. Mike Wilson, chief US equity strategist at Morgan Stanley, says the chances of a fourth-quarter rally have fallen, citing faltering consumer and business confidence, narrowing market breadth and lagged effects of the Fed’s interest rates as some of the challenges that he believes outweigh seasonal bullishness.