U.S. stock futures held steady Thursday night following a new record close for the S&P 500 Index (SPX), fueled by renewed optimism in artificial intelligence stocks. Futures on the Nasdaq 100 (NDX), the Dow Jones Industrial Average (DJIA), and the S&P 500 Index were down 0.13%, 0.09%, and 0.05%, respectively, at 11:21 p.m. EDT on August 28.
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Stock indices finished today’s trading session in the green. The Nasdaq 100, the S&P 500, and the Dow Jones Industrial Average gained 0.58%, 0.32%, and 0.16%, respectively. As we approach the end of August, September is usually a weak month for the stock market, based on historical trends. However, Adam Turnquist, who is the Chief Technical Strategist at LPL Financial, believes this year might be different, according to CNBC.
Indeed, he argues that while seasonal data gives a general sense of how stocks typically perform, it doesn’t reflect the current market’s strong momentum. “The trend is your friend when it comes to September,” he said, adding that the S&P 500 is currently showing strength with record highs and favorable conditions. Turnquist compares seasonal data to a weather forecast—it gives a typical climate, but not the specific “weather” we’re experiencing now. And right now, he says, the market is sunny.
With strong momentum and an upward trend, he believes the market has the support it needs to make September better than usual. He supports his argument with a key technical indicator: the 200-day moving average (DMA). When the S&P 500 is above this level heading into September, the average return for the month is a gain of 1.3%. However, when it’s below that line, the average return turns into a loss of 4.2%. This shows how much the current trend can influence September’s outcome.
Investors are now focused on new inflation data to close out August, with the personal consumption expenditures (PCE) index due. Economists surveyed by Dow Jones expect July’s PCE to rise 0.2% from the prior month and 2.6% year over year.
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Is SPY Stock a Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on the SPDR S&P 500 ETF Trust (SPY) based on 419 Buys, 78 Holds, and seven Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average SPY price target of $714.27 per share implies 10% upside potential.
