Historically, October has been a bad month for the stock market. In October, Dow fell almost 1.5%, S&P 500 declined by 2.5% while the tech-heavy Nasdaq 100 slid harder by nearly 3.25%. The infamous 1929 market crash and a few other significant crashes happened in October.
On October 24, 1929, the New York Stock Exchange lost 11% of its value, which became known as Black Thursday, when key American investors sat up and took notice for the first time. Subsequently, the Dow fell nearly 13% on Black Monday, October 28, 1929. The market dropped nearly 12 percent the next day, October 29, dubbed “Black Tuesday.”
Moving on to November, things look different at least what history suggests.
Global financial markets are likely to rally in November and December, predicts the CEO and founder of one of the world’s largest independent financial advisory, asset management and fintech organisations. The bullish prediction from deVere Group’s Nigel Green comes despite stock market corrections and weak investor sentiment.
Green says: “History shows that November is the second-best month of the year for markets, behind April. This November could be even more positive as some markets are currently in correction territory – falling by more than 10% – and so a swing to the upside will be more pronounced.”
November 2022 saw Dow Jones rallying 7%, S&P 500 gaining 8.4% and Nasdaq rising 9.1%.
The deVere CEO continues: “Over 72 years there have been 34 market declines. Only 12 of these have turned into bear markets. When does a recovery typically happen? 96 days after the start of the correction. We’re now around day 90. If all this data holds up, we’re about to see a year-end rally, which investors would not want to miss out on.”
Will there be a Santa Claus rally in 2023, only time will tell. However, given the unsettling developments in the Middle East and jitteriness in the bond market, the stock market may continue to see volatility between now and Thanksgiving day on November 23.
Still, a Federal Reserve pause and an earnings-led rally is making investors hopeful of ending 2023 with a bang. The deVere CEO concludes: “We expect a rally for the end of 2023. You should consider revising your investment mix to seize the potential opportunities in what we think will be a new phase.”