Market Strategy Radar Screen Weekly September 06, 2016

You Can’t Have Your Cake and Eat It Too…Or Can You?

Nonfarm payroll number and other economic data let the Fed off the hook for September

The market seemed to say that last week’s economic data wasn’t as much of a negative surprise as some investors and pundits tried to make of it as well as not good enough to set off Fed rate hike alerts in nervous segments of the market. p>

While the non-farm payroll number at 151,000 was a fifth off (or 20%) where a survey of economists had projected it would be, it was also not so far from expectations to rattle the equity market much, if at all.

For long-term fans of the economic recovery that has emerged beyond the Great Crisis into the current stateside economic expansion, last week’s payroll number looked “good enough” in consideration of the two prior months’ gains.

Recall that the non-farm payroll number in June and July knocked the cover off the proverbial ball and surprised to the upside with considerable magnitude (June at 287,000 jobs added vs. expectations for 180,000); July at 255,000 jobs added versus expectations for 180,000).

And we can’t forget May, which surprised so harshly to the downside (initially at 38,000 vs. expectations for 160,000) that even “perma bears” appeared stunned at the number.

What to make of September?

With August’s jobs number behind us and September already in progress investors may find themselves bombarded over the course of the next few weeks by reminders that September has a reputation for trying investors’ sentiments and fortitude.

We checked the performance of the S&P 500 in September over the last 20 years, from 1996 through 2015.

In that period 12 Septembers delivered positive results and eight were negative.

• From 1996 through 1999 September proved positive with respective gains of 5.42%, 5.32%, 6.24% and 5.78% (these
  were part of the tech bubble years).
• From 2000 through 2002 September ran red with respective declines of -5.35%, -8.17%. -11.0% (these included the bursting
  of the tech bubble).
• 2003 saw September 1.2% lower from the end of the previous month.
• From 2004 through 2007 September posted respective gains of +0.94%, +0.69%, +2.46% and +3.58%.
• September 2008 posted a loss of -9.08% (in the eye of the storm of the financial crisis).
• September 2009 and 2010 advanced by 3.57% and 8.76%.
• September 2011 saw a decline of -7.18%.
• September 2012 and 2013 saw advances of 2.42% and 2.97%.
• September 2014 and September 2015 featured respective declines of -1.55% and -2.64%.

Where will September 2016 take us?

For the complete report, please contact your Oppenheimer Financial Advisor.

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