Daily Spotlight

Investors Beware, 3Q is Here

As if 2022 has not been bad enough for investors, we are entering the worst-performing quarter of the year for stocks. We analyzed data collected on S&P 500 performance from 1980-2022. The strongest quarter has been 4Q, which has generated average gains of 4.6%. First- and second-quarter returns have averaged 2.0% and 3.2%, respectively. But the 3Q is barely positive, with an average return of 0.5%. Not every 3Q is a disaster. The "win percentage" for the quarter is 64%, which means the market delivers positive returns in the quarter almost two-thirds of the time. Yet the quarters that are negative really hurt: -12% in 1981, -15% in 1990, -15% in 2000, -18% in 2001, -14% in 2008, and -14% in 2011. Some events in these quarters were random: the September 11 attacks in 2001; the Lehman bankruptcy in 2008; and the S&P U.S. Treasury downgrade in 2011. But 3Q is also when companies have a better view on whether they are going to meet their estimates for the year, and they may signal if they are poised to fall short. What's more, the Federal Reserve can be active. If investors are unable to conclude that the Fed can start to bring inflation under control in this third quarter, stock prices likely will remain under pressure. ...  positive returns in the quarter almost two-thirds of the time. Yet the quarters that are negative really hurt: -12% in 1981, -15% in 1990, -15% in 2000, -18% in 2001, -14% in 2008, and -14% in 2011. Some events in these quarters were random: the September 11 attacks in 2001; the Lehman bankruptcy in 2008; and the S&P U.S. Treasury downgrade in 2011. But 3Q is also when companies have a better view on whether they are going to meet their estimates for the year, and they may signal if they are poised to fall short. What's more, the Federal Reserve can be active. If investors are unable to conclude that the Fed can start to bring inflation under control in this third quarter, stock prices likely will remain under pressure.   more

Market Podcast

Argus Lists

Weekly Economic Commentary