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Markets

Forex
Spring Bank Holiday
(UK Holiday)
02.06.22
Platinum Jubilee
Bank Holiday/
Tuen Ng Festival
03.06.22
Normal Hours Closed
Queen's Birthday
12-13.04.22
Normal Hours Normal Hours
Indices
US30
US30
SPX500
NAS100
US2000
VOLX
UK100
GER30
ESP35
FRA40
HKG33
JPN225
AUS200
EUSTX50
CHN50
Spring Bank Holiday
(UK Holiday)
02.06.22
Platinum Jubilee
Bank Holiday/
Tuen Ng Festival
03.06.22
Close 21:00 Closed
Queen's Birthday
12-13.04.22
Normal Hours Normal Hours
Commodities
SOYF
SOYF
WHEATF
CORNF
Spring Bank Holiday
(UK Holiday)
02.06.22
Platinum Jubilee
Bank Holiday/
Tuen Ng Festival
03.06.22
Close 18:20 Closed
Queen's Birthday
12-13.04.22
Closed Open 00:00
Metals
XAUUSD
XAUUSD
XAGUSD
Copper
Spring Bank Holiday
(UK Holiday)
02.06.22
Platinum Jubilee
Bank Holiday/
Tuen Ng Festival
03.06.22
Close 21:00 Closed
Queen's Birthday
12-13.04.22
Normal Hours Normal Hours
Energies
USOil
USOil
UKOil
Spring Bank Holiday
(UK Holiday)
02.06.22
Platinum Jubilee
Bank Holiday/
Tuen Ng Festival
03.06.22
Normal Hours Normal Hours
Queen's Birthday
12-13.04.22
Normal Hours Normal Hours
Stocks
HK Stock Baskets
Spring Bank Holiday
(UK Holiday)
02.06.22
Platinum Jubilee
Bank Holiday/
Tuen Ng Festival
03.06.22
Normal Hours Closed
Queen's Birthday
12-13.04.22
Normal Hours Normal Hours
Shares
Australian
Australian
Dutch
French
German
Hong Kong
UK
US
Spring Bank Holiday
(UK Holiday)
02.06.22
Platinum Jubilee
Bank Holiday/
Tuen Ng Festival
03.06.22
Normal Hours Normal Hours
Queen's Birthday
12-13.04.22
Closed Closed
Cryptos
Spring Bank Holiday
(UK Holiday)
02.06.22
Platinum Jubilee
Bank Holiday/
Tuen Ng Festival
03.06.22
Normal Hours Normal Hours
Queen's Birthday
12-13.04.22
Normal Hours Normal Hours

What is the September Effect?

The September effect is a market anomaly where traditionally, stock markets underperform, and share prices end up lower on average.

 

Excluding the New Year period, September is by far linked to the biggest number of clichés when it comes to resolutions: September is a time for a change, September is the best time to start a new routine, to buy a car, to get a gym membership.

 

It probably has something to do with the after-holiday psychology. Once we charge our batteries and clear our heads, we feel ready to move forward. Yet, September is also linked to high costs, such as schooling and that gym membership we mentioned earlier. It also means less free time as we are trying to put our decisions into effect. 

 

All the above are considered to create the so-called ‘September Effect’ in markets. However, the September Effect is more of a pattern than it is a phenomenon. 

 

Market analysts have observed that the stock market’s three leading indices (S&P 500, Dow Jones Industrial Average (DJIA) and Nasdaq Composite) typically perform poorest during September. What’s more, data analysis has shown that global share prices have fallen in more than half of the last Septembers.   

 

However, many traders question whether the September effect is real or just an urban financial legend. As with many other calendar effects (any market anomaly or seasonal behaviours), the causal relationship is difficult to verify. 

What is the September Effect?

“Remember, remember the effects of September”

The September Effect is associated with equity markets worldwide, while analysts attribute it to seasonal behavioural bias. 

 

For many people, September usually means a smaller budget (those £15 Tiki cocktails on your summer holiday may or may not be responsible for burning a hole in your pocket). However, the effect is felt not only with smaller budget traders but big funds too.

 

For example, investors often switch up their portfolios at the end of summer to cash in. During the summer months, the traded volumes are thinner as many investors usually refrain from actively trading. Once they return to work, they return to trading. As a result, the market experiences increased selling pressure and, therefore, an overall decline.

 

Also, many mutual funds cash in their holdings to harvest tax losses as they experience their fiscal year-end in September. Interestingly, there appears to be no particular market events or news contributing to this market anomaly.  

 

Since their establishment, the DJIA has declined by 0.8% on average in Septembers, the S&P 500 by 0.5%, and the Nasdaq also by 0.5%.

 

As it doesn’t happen every single year, the September Effect must not be used to predict the market movement. Besides, traders should focus on more than just seasonal patterns to make predictions and test their strategies. 

 

However, traders might find the September Effect an exciting opportunity to watch the S&P 500, Nasdaq 100 and DJIA. Our guide, Indices trading, explained, is the perfect starting point to get started with the market. 

Disclaimer: Eurotrader doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information provided here, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. We advise any readers of this content to seek their own advice.

Working Hours: 09:00 – 17:30 GMT+1

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Working Hours: 09:00 – 17:30 GMT+1