Q4 Kicks Off Amid Significant Risks: Is the Bull Market Already Over?

investing.com:

Yesterday marked the start of the final quarter of 2023—a year distinguished by a remarkable stock market recovery amid a continued selloff in the bond market.

Notably, major stock indices, bolstered by the surge of tech giants, have delivered substantial performances, with the NASDAQ Composite surging by approximately 27% and the S&P 500 posting an impressive 11.7% gain since the year's outset.

Europe has also demonstrated resilience, despite a recent correction, with the Euro Stoxx 50 currently standing at +9% YTD.

However, as previously mentioned, the persistent influence of inflation and the dramatic shift in monetary policies have cast a shadow on the bond segment for the third consecutive year. This trend is evident when examining US Treasuries as a benchmark, revealing an unprecedented bear market.

The pertinent question arises: should this development truly have come as a surprise, considering the era of near-zero rates and yields that preceded it?

History teaches us that sooner or later, excesses undergo correction; the challenge lies in predicting when precisely that correction will occur.

The statistics, which correctly forecasted the first half of the year, as well as the 'usual' September correction period, now seem in favor of a positive year-end, as evidenced by the image below.

Examining the dark blue columns, we can observe the monthly performance of the U.S. stock market in the last quarter of the year leading up to the election. Historically, it becomes evident that this performance tends to be positive, significantly outperforming the months of August and September, which consistently exhibit corrections.

Furthermore, in years characterized by negative performance in August and September, historical