Will September Seasonality Take Over?

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Our View

I think the most astonishing part of the S&P and Nasdaq, regardless of the VIX, is how much they are moving. I am not sure what other time period it could be compared to other than after the Fed spent billions in QE during the credit crisis. 

Last week, the Fed cut 50 bps, and Powell also acknowledged that inflation was still elevated. Everything has gone up in price, but does lower rates mean you will have more in your pocket at the end of the month?

Consider this: 

• Bonds have rallied 10.5% off the April 25th low. 

• Gold has risen significantly, with the price per ounce climbing by around 25% in 2024 to over $2,600.

• Orange juice prices surged by more than 26% in 2024, with futures prices for orange juice concentrate hitting $4.95 per pound.

• Water bills increased around 9% to 13.6%, depending on consumption and location.

• Credit card interest rates continued to climb and are maintaining historically high levels. The average interest rate for new credit card offers reached about 24.74% in September 2024, up from 24.62% in the summer, with some borrowers paying as much as 32%.

• Medical care benefits are projected to rise by 8.9%.

• Full coverage car insurance increased by 26% in 2024, reaching $2,543 per year.

• Homeowners insurance premiums in 2024 are expected to rise around 6%, bringing the national average to $2,522 (not Florida).

• The average rent in the US increased from $1,435 in 2019 to $1,712 in 2024.

I think this list could go on and on, but do you really think lower interest rates will put a lot more money in your pocket every month? Sure, it cost less when there was zero borrowing cost, but those days are gone. 

I know you are thinking to yourself that I never say anything good, but that's not true; there is just way more bad news than good right now — even though the stock market doesn’t show it.