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Midterm-season calendar history warns of a rough Aug-to-Oct stretch
A BTIG strategist points to past midterm-election years showing 7% or larger pullbacks in the August-to-October period, while S&P 500 momentum has been driven by sharply stronger second-quarter earnings.
A near-record stock market may face a more difficult stretch as the calendar enters the historically volatile midterm-election window from August 18 through October 11, according to a note cited by Yahoo Finance.
BTIG strategist Jonathan Krinsky said prior midterm-election years including 1990, 1998, 2002, 2010, 2014, 2018, and 2022 each saw at least a 7% pullback during the August-to-October period, while 1994 recorded a 5% drawdown and a further decline by December.
Krinsky added that investors may want to pare back risk or consider hedging broad equity exposure heading into the seasonally tough period.
Yahoo Finance also noted that the S&P 500 is near record highs, largely because second-quarter earnings have powered gains this summer, with FactSet data cited showing earnings on pace to rise at least 50% year over year and about 86% of reported companies delivering EPS above Wall Street estimates.
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