The stock market dipped Monday as investors spent Halloween spooked by the Federal Reserve’s interest rate hike plans, though major indexes closed out a banner month after suffering one of the worst Septembers in recent history.
Monday may be Halloween, but investors’ greatest fright this week will likely come Wednesday when the Fed shares the results of its latest policy meeting. Another 75-point increase to the federal funds rate is all but certain, but what the central bank shares about its plans for rate hikes into 2023 will be the market’s primary focus given the strong inverse relationship between the funds rate and stock performance.
Jason Draho, UBS Global Wealth Management head of asset allocation for the Americas, wrote in a Monday note to clients the latest round of quarterly earnings “were better than feared,” but said the recent bear market rally “doesn’t look sustainable” given the bond market’s weakness, intimating the market’s October surge was more trick than treat.
There’s a popular investment strategy to buy stocks October 31 and sell May 1 based on a theory that the market typically performs better from November through April than May through October.
This article was first published on forbes.com
Further Reading
Dow On Pace For Best October Ever, Second-Best Month In 30 Years (Forbes)
Why The Halloween Indicator May Work For Investors In 2022 (Forbes)