April is the cruellest month, opined TS Eliot, but for the S&P 500, this October is vying to become its “losingest” month in nearly five decades.
Proper English aside, this calendar month has handed the benchmark index more than its fair share of down days as investors grapple with the pace of US interest rate tightening, a sharp sell-off for technology stocks and continued concerns about the impact the US-China trade war might have on global growth.
That has already put it on course to be the worst monthly performance since February 2009, with the S&P 500 down 9.1 per cent for the October-to-date and flirting with correction territory from its September record high.
But it is the number of down days that makes October stand out for all the wrong reasons.
The S&P 500 finished lower in 16 of the 21 sessions to the close on October 29. That means 76.2 per cent of the trading days so far this month resulted in a decline, which is the highest proportion of losing days in a month since April 1970. (Seems Mr Eliot was right about April after all.)
Should the S&P 500 hang on to its gains today, and also close higher on October 31, the proportion of losing days would fall to 69.6 per cent, which would rank as the losingest month since October 2008. A gain today and a decline tomorrow would then rank October as the losingest month since September 2000.
The proportion of declines is also historically high even if we adjust for the varying sizes of calendar months. Employing a 30-day “losing average”, the proportion of losing days over the past 30 sessions ran at 70 per cent on October 26 and 29.
That proportion is on par with November 11 and 12, 2008, as well as soggy patches in July and May of 2002, September 2001 and October 2000.
It is worth noting the 30-day losing average never exceeded 70 per cent during the financial crisis, so the possibility of lower closes on October 30 and 31 would make this the losingest period since October 2000, or even the early 1980s.
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