Nothing Matters but October

Welcome to October! In Chicago anyway, it seemed we dove from 80 degree summer evenings to fall temperatures overnight! October the month that is infamous for the crash of 1929 (that I read about) and again in 1987 (that I lived and traded in the OEX option pit on the CBOE) is actually a month that more often historically has staged market recoveries, albeit from negative September results. However this year September wasn’t a major downer at all in the S&P 500 Index. Led by energy names rallying last week, due to an OPEC agreement for the first announced cutbacks in production since 2008, the major market averages were able to post a small gain for the week and settled only about 22 points below its all-time closing high!

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You can see from the chart above that most of September was a bit of a jigsaw down one day back up the next. To me this shows very little conviction in any longer term themes. Concern about Deutsche Bank one day and the next with rumors of a pending DOJ settlement the financial sector rebounding 1.4%. While there is plenty of potential uncertainty coming in October with the election, the continuing Deutsche Bank story, and the ever present FED rate leanings, we do have actual 3rd quarter corporate earnings results will become known to investors in the coming weeks and that is where traders’ attentions will quickly focus.

The unofficial earnings season traditionally has kicked off with Alcoa’s (AA) announcement which isn’t scheduled until next Monday October 10th so we will have to wait just a bit before getting those results. In the meantime, the first Friday of every month the Department of Labor releases the all-important non-farm payroll statistics. For active traders, these job growth numbers are the biggest data point which they believe the FED uses to justify their interest rate decisions. The estimate from Thompson Reuters is for an increase of 170,000 jobs, which many believe will indicate that at the FOMC meeting in December we will once again see the FED increase the Fed Funds rate.

Tuesday night, the first and only vice presidential debate will be held at Longwood University in Farmville, Virginia. While not likely to provide the Saturday Night Live material that the Clinton – Trump showdown did, it may be worth tuning into since very few of us could pick either potential veep out from a lineup and more importantly, both Clinton and Trump are two of the oldest candidates ever to run for the highest office in the land.

This week, Wednesday night will also determine which team, the San Francisco Giants or the New York Mets will be the first obstacle on the Cubs historic march to their destiny! Nothing matters but October! Friday night – game one for the Cubbies and who isn’t pulling for them? Isn’t 108 years to wait long enough?

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