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By Nicholas
Jasinski | Thursday, September 30 On
to the Next Challenge. Congressional
wrangling produced
some progress today, with both parties in both chambers voting to
pass a continuing resolution funding the federal government through
Dec. 3. The measure next heads to President Biden, who is expected to
sign it into law tonight. That would avoid a government shutdown for
at least the next couple of months. That was the
least of Congress's problems, however. A bipartisan infrastructure bill,
Democrats' under-negotiation reconciliation budget, and a debt-ceiling
increase or suspension remain outstanding. None of those appears to have a
quick path to a resolution ahead of them. Expect plenty of noise to continue
emanating from Washington on all three of those fronts. A highly
unlikely worst-case-scenario U.S. government debt default notwithstanding,
the most meaningful to the market of those items should be the tax
provisions in Democrats' reconciliation bill. Barron's deputy editor Ben
Levisohn covered
that issue a few weeks back. Stock
indexes finished September and the third quarter today on a sour note. The S&P
500 lost
1.2%, the Dow Jones Industrial
Average fell 1.6%, and the Nasdaq
Composite closed down 0.4%. A midday buy-the-dip rally
fizzled out in the last hour of trading, and indexes closed at their lows of
the day. It was a
gnarly September for most stocks and sectors, with energy shares the only
group in the S&P 500 to rise during the month—the only time that has
happened in the past 30 years. The S&P 500 finished the month down
4.8%, although it still managed to eke out a 0.2% gain for the third quarter.
That extends its winning stretch to six consecutive quarters, but snaps a
seven-month streak of gains. The Dow and
Nasdaq closed September down 4.3% and 5.3%, respectively. It was the worst
September for all three U.S. large-cap indexes since 2011, the last time a
debt-ceiling fight was unfolding in Washington. The Dow posted a 1.9% loss
for the third quarter, its first losing quarter since the Covid-19 selloff in
the first quarter of 2020. Next comes
October, a month
known for its volatility and a few stock market crashes, most
notably in 1929, 1987, and 2008. That October tendency goes back even
further, even getting a memorably sarcastic line in Mark
Twain's 1894 novel Pudd'nhead Wilson.
He wrote: "October. This is one of the peculiarly dangerous
months to speculate in stocks. The others are July, January, September,
April, November, May, March, June, December, August, and February." The pseudonymous
author was on to something. Outside of a handful of indeed-awful October
performances over the past century, the market's October returns are in fact
relatively average in the majority of years. The S&P
500 is up in 57% of Octobers since its inception, and averages a 0.4%
gain in the month. Excluding the ugly crashes in 1929, 1987, and 2008,
the index has gained 1.1% on average in October. |
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DJIA:
-1.59% to 33,843.92 The Hot
Stock: Paychex +4.3% Best Sector:
Communication Services -0.3% |
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