The following is your September 2024 Robertson Stephens Monthly Performance Report.
The chart above has many investors (including me) nervous about valuation and too much of a good thing. History makes a good argument for us to reach for the Prilosec and to stay invested. The S&P 500 Index rose 2.14% in September, bringing its monthly winning streak to five. Stretches like this are rare but not unheard of. This is the 39th case since 1900 and the 30th since 1950.
The question after such a long run is whether the rally has left the market dangerously overbought or will the positive momentum lead to future gains. Consistent with most analyses of the price action of the stock market, history sides with the latter. One month later, the S&P 500 has risen 77% of the time by an average of 1.4%. Six months later, the index rose 85% of the time by an average of 7.1%. One year later, the stats are 84% of the time by an average of 11.7%.
Needless to say, one data set (5 month winning streak) is not enough to overcome investor acrophobia. Bullish trendlines (50 day above 200 day since 2/2023) and leading indicator models (8 out of 10 LEI’s are positive) also confirm that the S&P remains in an uptrend. And it’s important to note that historically, easing cycles into soft landings have been bullish for stocks.
The runway North, and possibly the runaway North (climatic end of cycle melt-up) for stocks into year end continues to look all-clear.
We’ll begin looking at 2025 in Morning Notes next week.
Be well,
Mike
Sources: Addepar, BCA Research, Bloomberg, and Ned Davis Research
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