AllMarket Outlook
logoArgusOctober 01, 2024

Daily Spotlight: Fourth Quarter Typically Positive for Stocks

Market Outlook
Bullish - Short term
Summary

In theory, investors can breathe easier heading into the fourth quarter, when markets typically post the strongest returns of the year. To draw this conclusion, we analyzed data collected on S&P 500 performance from 1980-2022. By our calculations, the quarter has generated average gains of 4.8%, compared to gains of 2.3%, 2.9%, and 0.4% for 1Q, 2Q, and 3Q, respectively. The fourth quarter is consistent as well, with a "win percentage" of 82%. This means that stock returns are positive in the quarter four years out of five, and compares to winning percentages of 67% in 1Q and 2Q and 62% in 3Q. But to be fair, the 4Q has posted its share of clunkers. In 1987, which included Black Friday, stocks fell 23% during the period; while in 2008 they sold off 18%, after the collapse of Lehman Brothers and as the U.S. economy plunged into a deep recession. As recently as 2018, stocks slid 14% in the final quarter when trade wars intensified and the Federal Reserve raised rates. But last year, when stocks were still in the early stages of the current bull mar

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