S&P 500 could hit unprecedented 6,000 by year-end after unusual gains in September Investing.com

Investing.com – Gains rallied in September, bucking a trend that is usually the weakest month of the year, and now has history on its side to post another surge of up to 6,000 by the end of the year, according to new analysis from the Bank of America.

“When the SPX is up in September, the rest of the year has had stronger returns, with the SPX up 67% of the time, with an average return of 1.62% (1.54% median) in October, and an increase of 79% of the time. average return of 5.08% (median 5.81%) in Q4,” BofA analysts noted in a report Monday. “This supports the SPX 6000 through the end of the year,” they added.

September is typically the weakest month of the year for the S&P 500, but the major index gained 2.02% this month, adding to its 20.81% year-to-date gain, setting the stage for a potentially robust fourth quarter”. analysts said.

History suggests that when the S&P 500 is up between 15% and 25% year-to-date through the third quarter, the index has an average fourth-quarter return of 4.40%, indicating that the index could accumulate gains to end the year between 5,930 and 6,185.

In addition to seasonal weakness, the strong gains seen in Q3 during a presidential election year bode well for the S&P 500, BofA adds, noting that when the index is up in an election year, a positive Q4 is seen 89% of the time ahead of time. , with an average yield of 4.98%.

But with all the optimism about further gains, analysts stressed the importance of the S&P 500 maintaining support levels in any downside event.

“Holding the 5670-5650 area to 5615 (SPX 5600s) would keep this breakout firmly in place,” they said, adding that the road higher is likely paved with volatility and potential risks heading into the final quarter of the year.