S&P 500 exchange traded funds have rallied 10% from the Aug. 9 low heading into September, historically a weak month for stocks.
“After the S&P 500 tested the 1120 level several times, we now believe the market is undergoing a counter-trend rally that could recover much of what was lost over the past few months,” Standard & Poor’s said in a strategy note.
“This advance could last the entire month of September and thus run contrary to the S&P 500’s typical performance, in which it posted average declines since 1945 and recorded falling prices in 55% of all observations,” S&P said, citing performance since 1945.
SPDR S&P 500 ETF (NYSEArca: SPY) was flat at last check as investors awaited the August employment report, which crosses Friday.
If the nonfarm payrolls report disappoints, it could boost the likelihood the Federal Reserve announces more aid for the economy at its September meeting. [Gold ETFs Rise on Fed Specuation]
Dissent among Federal Open Market Committee members has “increased investors’ optimism for a third round of Fed-induced stimulation,” S&P said.