This rare occurrence could eclipse September’s disastrous reputation

VaselineSeptember 6, 2024

0 5 minutes read

This rare occurrence could eclipse September’s disastrous reputation

September is historically a terrible, horrible, no good, very bad month for stocks…

Editor’s note: my colleague Luke Lango – Chief Investment Analyst at InvestorPlace – crunched some numbers… and identified a rare economic event that historically triggers a stock market boom. It’s happened three times in the past 30 years – in 1995, 1998 and 2019 – and it’s triggered a stock market boom on each occasion. In about two weeks, according to the odds, there is a 100% chance that this event will happen again. That’s why Luke hosts a breaking news Wednesday, September 11 at 8:00 PM ET designed to help people prepare for this rare economic dynamic. I invited him here today to explain why he believes this set of circumstances will “work” again this time, despite September’s weak start. He believes this event will trigger a lot of stock breakouts and has selected three trades that are set to go higher. Book your place for Luke’s briefing here. And make sure you read his message below…

September is historically a terrible, horrible, no good, very bad month for stocks – and Tuesday certainly lived up to its reputation.

Over the past 100 years or so, stocks have fallen an average of 1.2% in September, making it the worst month for stocks by a wide margin.

The past five years have been particularly bad for trading in September. Since 2019, stocks have averaged a 4.2% monthly decline.

And Tuesday was, quite simply, awful. The S&P 500 fell more than 2% in one of its worst days of the year.

So…September is a wash, right? Time to sell and move back in October?

Not. Time to buck the consensus and buy stocks in September.

Why?

Because a one-time event coming up in about two weeks could make September the best — not the worst — month of the year for investors.

Here’s what I’m talking about…

Take advantage of other people’s worries about the recession

Right now, many people are worried about a recession. These fears make sense. Unemployment rates are higher. Available positions scroll below. Consumer spending is slowing, while consumer confidence is weak.

If all these trends continue, the economy could very well enter a recession.

But those trends will likely start to reverse in about two weeks – because a very specific, very strong and very rare economic dynamic will emerge.

This set of circumstances has only happened three times in the last 30 years. Each time it has done so, it has strengthened the economy and sent stocks higher — even if they had fallen beforehand.

For example, in 1998, the economy was weakening and inventories fell throughout the late summer and into the fall. In fact, the S&P 500 fell nearly 20% that summer.

Then, in September 1998, this rare economic dynamic occurred. As you can see in the chart below – which shows the strong parallels between this year’s market performance and that of 1998 – from October 1998 to July 1999, the stock market increased by almost 50%!

We believe that a similar dynamic will emerge in about two weeks. When it comes out, I expect it to produce the same result it produced in 1998 – a major stock market rally.

Stocks that will win

The US economy looks well positioned to achieve a soft landing in late 2024. From there, the economy should regain strength in 2025 as we move past the US presidential election (elections always cause short-term political unrest and volatility of the market) and the Information Investment Boom continues with vigor.

Stocks will charge more. AI stocks will remain the biggest winners.

In our view, the way forward for the markets is clear and positive. After this event, the economy will grow stronger. Earnings will rise and so will stocks…

Especially AI actions.

Indeed, despite all the talk of an “AI bubble,” the data actually suggests that we remain in the early stages of an ongoing AI boom.

For example…

Electronic design company Keysight Technologies Inc. (KEY) recently reported that enterprises are re-architecting data centers for AI, leading data center operators to upgrade to high-speed bulk data networking products – massively boosting Keysight’s business. On a conference call with analysts, the company’s CEO said it’s becoming pretty clear that AI is going to be a transformative technology.
Manufacturer of integrated circuits analogical Devices Inc. (ADI) says they’re seeing huge customer efforts to modernize and digitize the power grid in response to the massive AI infrastructure build going on right now.
Telecommunications infrastructure company Dycom Industries Inc. (DY) find that the demand for low-latency AI data center connectivity solutions is growing rapidly.
Technical solutions provider Unisys Corp. (I HEAR) report a 25% increase in new business signings in the first half of 2024, driven mainly by new AI services. Large linguistic models (LLMs) help media firms create dynamic ads for targeted audiences and allow restaurants to collect data about payment channels to improve restaurant operations.
And Wednesday morning, data center operator GDS Holdings Ltd. (GDS) gave a very bullish read on the Asian data center market this morning.

The evidence here is clear. The AI boom is bringing real and significant financial benefits across the global economy.

So don’t just buy stocks. Buy the best AI stocks – this is where the growth is happening right now.

Answers to your questions

So what exactly is this dynamic that could push stocks (especially AI stocks) higher? How does it appear? Why is it so rare and how does stock increase?

We intend to answer all these questions and more in one breaking news Wednesday, September 11 at 8:00 PM ETintended to help you prepare for this rare economic dynamic.

A little before 8:00 PM ET, I will send you an email with the subject (The Great Technical Reversal of 2024): Your access link. To join me, just click on the link in that email.

To make sure you get that email, just reserve your seat for my briefing by clicking here.

I know you’ll want to be there as this major market event is scheduled for next week.

I think it will send a group of rising stocks higher than anyone can imagine.

How do I know? Because the same dynamic occurred in 1995, 1998 and 2019.

In 100% of these cases, it triggered a massive boom.

This event will only happen once. If you miss this chance, you won’t get another.

Most importantly, in this briefing, we intend to reveal a game plan to help you take advantage of this rare economic dynamic.

So…don’t run away from the current market volatility as September is usually a bad month for stocks.

Rather, embrace it. Participate our special briefing on Wednesday, September 11 at 8:00 PM ET. And learn how to potentially turn that volatility into profit.

Book your place at that briefing now.

Sincerely,