Key Highlights
- The S&P 500® was down 9.34% in September, bringing its YTD return to -24.77%.
- The Dow Jones Industrial Average® lost 8.84% for the month and was down 20.95% YTD.
- The S&P MidCap 400® fell 9.36% for the month, bringing its YTD return to -16.55%.
- The S&P SmallCap 600® was down 10.05% in September and had a YTD return of -24.02%.
Market Snapshot
September lived up to its historical standing of the worst month of the year (average -1.03%), with the S&P 500 posting a broad 9.34% decline (the worst September since 2002’s -11.00%), while the YTD return was -24.77%, the worst YTD Q3 standing since 2002’s 28.94% decline (but at least Q4 2002 was up 7.92%). All 11 S&P 500 sectors were down for September, and only 27 issues in the index posted a gain for the month (with only 14 of the 27 up YTD).
What started in Jackson Hole (on Aug. 26, 2022, with a 3.37% decline for the S&P 500) didn’t stay in Jackson Hole, as several September buy-the-dip strategies ran well short of countering the reality of higher interest rates (now expected to stretch well into 2023) and high inflation U.S. Equities September 2022 Market Attributes 2 (fueled by high employment, with strong demand). On the Street, the 3,900th floor gave way, with the S&P 500 breaking below the recent June 16 closing low (3,667) and re-establishing a new battle line at 3,600 (trading as low as 3,610), until the last minutes of the last trading day, when the index broke under 3,600 to close at 3,585.62 (low of 3,584.13).
Looking ahead, October brings earnings, with Q3 estimates already declining 7%, and the whisper numbers a bit more than that. The larger concern (than the actual numbers for Q3) is the guidance for Q4, as consumers have pulled back, inflation continues and the Fed’s "adjustments” will likely have a more substantial impact.
The S&P 500 closed at 3,585.62, down 9.34% (-9.21% with dividends) from last month's close of 3,955.00, when it was down 4.24% (-4.08%) from the prior month's close of 4,130.29 (up 9.11% [9.22%]). The three-month period posted a loss of 5.28% (-4.88%), the YTD return was -24.77% (-23.87%) and the one-year return was -16.76% (-15.47%), with the index down 25.25% (-24.35%) from its Jan. 3, 2022, closing high, posting a new 2022 closing low of 3,585.62 (on Sept. 30, 2022), and it was up 5.89% (10.41%) from its pre-COVID-19 Feb. 19, 2020, closing high. Since Biden won the Nov. 3, 2020, U.S. election, the index gained 6.42% (9.57%), but from his Jan. 20, 2022, inauguration, it was down 6.91% (-4.52%).
The Dow® ended the month at 28,725.51, down 8.84% (-8.76% with dividends) from last month's close of 31,510.43, when it was down 4.06% (-3.72%) from the prior month's 32,845.13 close (6.73% [6.82%]). The Dow officially entered a bear market, as it was down 21.94% from its Jan. 4, 2022, closing high (of 36,799.65). The three-month return was -6.66% (-6.17%), the YTD return was -20.95% (-19.72%) and the one-year return was -15.12% (-13.14%).
