September has historically been the worst-performing month for the S&P 500 (SPX) since 1950, although Goldman Sachs macro trader Paolo Schiavone believes that investors should take advantage of the weakness and buy the dip.
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Schiavone says that the Fed’s next cycle of rate cuts has already begun to be priced into the market and could lead to further gains and an acceleration of the economy. The Fed will host its next Federal Open Market Committee (FOMC) meeting on September 16-17 and will likely lower rates by 25 bps. If this happens, it would mark the first rate reduction since December 2024.
S&P 500 Could Rise to Between 6,700 and 6,900, Says Schiavone
Schiavone adds that a new rate cut cycle could drop rates to the 3% range while lifting the benchmark index to between 6,700 and 6,900.
The macro trader points out that asset prices have decoupled from economic performance over the past 15 years, resulting in investors expressing “strong discomfort” with market valuations. He expects this trend to persist at a slower pace, signaling that economic data must “carry the load.”
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