Markets finished in the red for this first trading day of a holiday-shortened week, with the Dow shedding -186 points, -0.53%, the S&P 500 -0.42%, the Nasdaq — which had been hugging breakeven most of the entire session — came in -0.07%, and the small-cap Russell 2000 sank early on and closed at lows for the day, -2.10%. All indices are up from a week ago, but only the Nasdaq is still showing gains for the past month of trading.
As you probably already know, September is historically the worst month for equities trading. According to the Wall Street Journal, since 1945 the S&P 500 (and the index it was modeled after previously) have brought in an average loss of -0.73%, with three separate Septembers bringing in double-digit losses, including 1974’s all-time worst -12%, and the fall of Lehman Brothers in September 2008 helped bring about the Great Recession. Only two Septembers — 2010 and 1954 — have brought in more than +8% for the month.
There is no reason to expect, from a socio-economic perspective, that anything this September is particularly expected to drag down market indices meaningfully. That said, with gains of +35% year to date on the Nasdaq and +17.5% on the S&P 500, perhaps another down September would help bring these gains down to more “normal” levels. Perhaps we’ll wind up pivoting once again on the next Fed meeting on monetary policy. Currently, odds are coming down that interest rates will be increased again. Should the Fed surprise by ratcheting up another 25 basis points, this might be a boon for bears.
Tomorrow, we’ll see final data in the Services sector, from ISM and S&P PMI — both for August. There will also be new trade deficit numbers for July, ahead of the opening bell. In the afternoon, a fresh Beige Book will be released — these are all quality economic metrics. But it’s unlikely any of them would be able to shift trading sentiment by themselves; we’ll look for cumulative effects of new data on investment attitudes in the major indices.
Cybersecurity firm Zscaler ZS trounced estimates after today’s close for its fiscal Q4, with earnings of 64 cents per share easily surpassing the 49 cents in the Zacks consensus, on $455 million in quarterly revenues, which outpaced the $430.4 million analysts were expecting. Double-digit growth in billings boosted the San Jose, CA-based company in the quarter, while guidance was raised for next quarter and fiscal year. Shares had rocketed higher in late trading on the news, but has tempered down to breakeven with the day’s close. Zscaler stock has gained more than +47% year to date.
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