September has long been a bearish month on Wall Street, and this year, ETFs could be where pressure first materializes.
In the past, the S&P 500 fell more than half the time in September, down an average of more than 1.2%, Bank of America said. This time, the risk levels are higher: stocks in the index have risen 17% since May, valuations are close to dot-com bubble levels, and hedge funds and quant strategies alike are running with high exposure, Bloomberg said. Mix in a Federal Reserve policy announcement, inflation readings, and the seasonal slowdown in corporate buybacks, and volatility might be poised to erupt.
