Positive September ponts to strong SPX for rest of year

Investing.com -- A strong September rally for the S&P 500 (SPX) suggests a bullish outlook for the remainder of 2024, according to Bank of America analysts.

Historically, the bank says that September is the weakest month of the year, with an average return of -1.20% for the SPX.

However, they note that this year's September delivered a 2.02% rally, which points to a stronger fourth quarter. BofA says that when the SPX is up in September, the rest of the year tends to see an average return of 5.08% in 4Q, with the index rising 79% of the time, supporting a potential rise to SPX 6000 by yearend.

"A positive September in an election year also bodes well for the rest of the year with the SPX up 83% of the time in October on an average return of 1.66% (1.50% median) and up 83% of the time in 4Q on an average return of 4.65% (3.21% median)," writes the bank. "This supports the case for SPX 5940-6030 into yearend."

BofA says year-to-date (YTD) performance is another key indicator for the rest of the year.

They note the SPX rallied 20.81% through 3Q 2024, and when the index is up YTD through 3Q, it tends to deliver stronger than average fourth-quarter returns.

Historically, the SPX has gained 4.45% on average in these scenarios, which points to an SPX level of 5970-6015.

Overall, BofA's analysis suggests that the SPX could be poised for continued growth, supported by positive seasonal factors and technical patterns, with potential upside targets of 5930 and 6180.

Source: Investing.com