Joining me now is Sam Stovall chief investment strategist at C.
F R A as Sam, it's always good to see you, especially as we start a new month
of March And let's talk about some seasonality here.
What history might tell us about how the stock market
could move in March.
Well, hello kristen, Good to talk to you again.
And I guess investors should not be surprised that
the market fell in february because it normally does,
it is the second worst performing month of the year, second only to september,
but you can breathe a little sigh of relief because history
then says that March ends up being a better month.
Actually, it's the fifth best month of the year.
Also the fifth lowest in terms of
volatility and from a batting average perspective,
it's Higher by about two out of every three years.
Um,
add to that the fact that it's a midterm election or I
should say the third year of a president's term in office,
the batting average moves up to 75% of the time
and leads us into the best month of the year,
which is April.
So just looking at history seasonality obviously not a guarantee.
Uh,
there is more reason to be optimistic than certainly we experienced in February.
What about for investors?
Sam, I think if you're a trader obviously that,
that historical perspective does really help and if you have money
on the sidelines and you're thinking about when to get in.
I know that's valuable information as well, but doesn't mean we're out of the woods.
Does it mean it is smooth sailing from here
perhaps for the rest of the year for stocks?
Well,
I think that's certainly the tricky question because
while we believe that the Fed will be ready
Rates three more times
in March May and June by 25 basis points each.
We think they will then hit the pause button at the middle of the year.
But the Fed just like our economists are data dependent.
So a lot of people were surprised by the strength of the consumer price index,
producer, price index, retail sales, industrial production last month.
So now I think they're on edge worrying that we
could see similar hotter than expected readings for inflation,
employment etcetera in March.
So we have to wait till the middle of the month to get that information.
But again, if you did look to history,
you would find that essentially the best performing groups uh within the
S and P have been on the side of building product,
industrial gasses
and oil and gas exploration and production. So
more on the cyclical side because we find the consumer
discretionary and industrials tend to be among the better performers.
Okay, how does the economic data look to you sam of course,
the consumer responsible for most
of the vast majority of overall GDP growth in this country.
House the consumer fairing
Well, the consumer is faring fairly well.
If you look certainly at retail sales were up 3% last month.
Our expectation is we'll be up 0.4% for the next reading.
So certainly a softer read because that retail sales number last month,
I think spooked a lot of investors
when we look to C. P. I. P. P. I.
Or inflation measures,
we still believe that on a year over year basis they will
be coming down albeit slowly but still in the right direction.
Um,
So the one thing that sort of was a bit of concern was that the
consumer confidence data that came out recently was
a little weaker than had been anticipated.
So I guess consumers are still a little bit concerned about how bad
inflation will be as well as how high interest rates will go.
Yeah, I think a lot of money, a lot of people are trying to save money.
SaM, that's for sure where they can and if they can in this environment,
Sam Stovall, chief investment strategist at CFR A SaM. Thank you.