September 2024 Market Commentary: Navigating Volatility and Fed Expectations

In this month’s commentary, Brad Gotto, CEO of Fiat Wealth Management, and Tim Holland, Chief Investment Officer of Town Square Capital, focus on recent market trends and what to expect moving forward.

August Recap: A Rollercoaster Month

August saw significant volatility, starting off weak but ending on a strong note. The S&P 500 fell as much as 8% mid-month but rebounded to close up around 2.5%. This wild swing highlighted the difficulty of timing the market, as gains often follow market lows. Positive, yet modest, economic data helped ease inflation fears, shifting the focus to a possible "soft landing" scenario where the Federal Reserve might lower rates without tipping the economy into recession.

September: A Historically Tough Month

September is often the worst-performing month for the market, and this year hasn’t started off well. The S&P 500 dropped 2% on the first day of trading, continuing a four-year losing streak for the month. Historically, the stock market tends to see increased volatility after summer as investors reassess their positions and take profits.

Fed Rate Cut on the Horizon

The Federal Reserve is set to meet in mid-September, with expectations of a rate cut. The market is anticipating either a quarter-point or half-point reduction. The upcoming August jobs report will be a key factor in determining the size of the cut. The Fed is aiming for a soft landing, trying to slow the economy without triggering a recession.

Key Takeaway

As markets remain volatile, especially with the upcoming election, Brad and Tim emphasize the importance of maintaining a long-term perspective. Timing the market is tricky, and the Fed’s next move will be critical in shaping the market’s direction in the final quarter of the year.