ADP Data Alarming, September and US Stock Market

٢ سبتمبر ٢٠٢١

The main statistics of yesterday were the US employment data from the ADP. Experts expected 600K +, but in fact 374K came out. On the one hand, a failure. On the other hand, it should be remembered that the main data block will still be published on Friday. And extrapolating yesterday's data to Friday is quite a thankless task, simply because the correlation between ADP and NFP is about 25%. So it is clearly too early to sprinkle ashes on your head. But you should be on your guard.

However, judging by the dynamics of the US stock market, no one is going to be alarmed. But in this case, the principle "the worse the better" applies. Weak US labor market data will show that Powell was right when he said that monetary tightening in the US, because a fragile economic recovery is all about it. And if Powell was right, then on September 22, at the end of the next FOMC meeting, nothing in this world will change. So you can continue to feast.

However, purely statistically, September is not the best time to buy on the US stock market, out of context, whether the Fed will tighten monetary policy or not. The point is that over the past 70 years, the worst month of the year for the US stock market is September. This is the worst month on average in the last 10 years, in the last 20 years from the last 70 years. On the face of it, there is clear stability. And the rule "sell in May and go away" also, in general, did not appear out of the blue.

So, despite the continued growth in US stock indices, we continue to recommend selling US stocks.

Another important event yesterday was the OPEC meeting, at which, as expected, the participating countries will confirm the current agreement, according to which production will be increased by another 400K b / d in September. In fact, it turned out that way, respectively, the oil was under the downward pressure. Which is logical and logical.