All tricks and no treats. Forget about ghosts, skeletons and psycho killers wearing hockey masks. A chart of the Nasdaq Composite is far more terrifying, especially after Amazon and Intel plunged following their earnings and brought the broader market down with them.
The Nasdaq nosedived 2.9% on Friday, its worst one-day decline since June 5 and was down 2% this week, capping off a brutal month for the tech-heavy index in which it tumbled 5.3%.
The Dow Jones Industrial Average and S&P 500 both fell Friday too, declining 1.1% and 1.8% respectively, and losing 0.6% and 0.9% on the week. But the Dow managed to post a 1.7% gain in October while the S&P was down 0.9% for the month.
There are several reasons for the October choppiness. Inflation concerns -- and rate hike worries -- haven't gone away. Disappointing earnings from top tech companies have also spooked investors, increasing doubts about how long AI can prop up the market.
But now that October is in the rearview mirror, the market can look ahead to a month that is typically strong on Wall Street, and Halloween frights can give way to Thanksgiving delights.
The S&P 500 has averaged a 2.3% gain in November during the past 29 years, the best performance for any month, according to a report from J.P. Morgan Private Bank global investment strategist Kriti Gupta and portfolio manager Nick Roberts. The jobs report on Nov. 6, earnings from Nvidia on Nov. 17 and Anthropic's expected IPO before Thanksgiving could all be positive catalysts for the market.
The S&P 500 has posted an even higher gain in Novembers that fall during midterm election years -- around 2.75%. But Gupta and Roberts conceded there are two significant worries about how the elections next week play out.
First, there's the possibility that the new Congress may call for a slowdown in building out data centers. That may be priced in though, given the current volatility in tech stocks.
There's also the risk that politicians may push for more fiscal spending at a time when bond yields are already elevated.
"Lawmakers can be encouraged to fund priorities from both parties -- yielding more spending, not less. In a world where global bond markets are sensitive to growing government deficits, this dynamic can have long-term consequences," Gupta and Roberts wrote. "That can have ripple effects into other financial markets, especially stocks."
So investors beware: November is historically a strong month for markets, but it could still bring a distinct autumn chill.
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This Weekend's Magazine
The Calendar
The volatility could continue next week with a busy earnings and economic calendar. On top of that, there is the matter of the midterm elections on Tuesday, which could affect stocks in specific sectors such as crypto, energy, and healthcare.
Roughly 135 S&P 500 index companies report earnings next week starting with Apple and Palantir Technologies on Monday. Advanced Micro Devices, Amgen, and Pfizer release their results on Tuesday, followed by McDonald's and Qualcomm on Wednesday. Airbnb announces earnings on Thursday, and Moderna on Friday.
The jobs report from the Bureau of Labor Statistics on Friday is the key economic release this week. Fed Chair Kevin Warsh described the labor market as stable this past week at his post-FOMC meeting press conference. The Institute for Supply Management releases its Manufacturing Purchasing Managers' Index on Monday, and its Services PMI on Wednesday
-- Dan Lam
What We're Reading Today
Exclusive: Half of 'Big Money' Managers Still Bullish on AI Boom
Binance's $6.3 Billion Hack Rattles Crypto Market
The Trader: Investors May Need to Look Beyond Tech for Profits
Anthropic's IPO Is Still an Enormous Gamble
And this week's cover story: Inside China's Ruthless EV Blitz
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