Strong September Rally Boosts Bullish Outlook for S&P 500

Investing.com — According to Bank of America analysts, a strong September rally for the S&P 500 (SPX) indicates a bullish outlook for the remainder of 2024.

Historically, September is the weakest month of the year, with an average return of -1.20% for the SPX. However, this year, September delivered a 2.02% rally, suggesting a stronger fourth quarter. When the SPX is up in September, it averages a 5.08% return in the fourth quarter, succeeding 79% of the time, potentially rising to SPX 6000 by year-end.

“A positive September in an election year bodes well for the rest of the year,” writes the bank. The SPX typically rises 83% of the time in October, with an average return of 1.66% and carries this positive trend into the fourth quarter, averaging a 4.65% return.

BofA emphasizes that year-to-date (YTD) performance is crucial. The SPX is up 20.81% through Q3 2024, and historically, when the SPX is up YTD through Q3, it delivers above-average fourth-quarter returns, averaging 4.45%, suggesting a potential SPX level of 5970-6015.

In summary, BofA’s analysis suggests the SPX is set for continued growth, supported by positive seasonal trends and technical factors, with upside targets of 5930 and 6180.