Market volatility is unlikely to abate anytime soon. Data compiled by Trivariate Research shows that the S&P 500 has lost an average of 1.3% in September since 1929. The firm also noted that the benchmark’s overall volatility this month is among the four largest, with a standard deviation of 5.8%. August was also a choppy month, with the S&P 500 selling off early in the period before recovering. October is also very volatile. The standard deviation for the S&P 500 for this month is 6%. However, the S&P 500 is averaging a 0.5% gain this month. This difficult environment is making even some of Wall Street’s biggest bulls hesitant. “I think investors should be cautious over the next eight weeks,” Tom Lee, head of research at Fundstrat, told CNBC’s “Squawk Box” on Tuesday. “The market has risen in seven of the eight months this year. So we know it’s an incredibly strong market. But we also have the September rate cuts and the election, things that are going to make people nervous.” Wall Street has priced in a Federal Reserve rate cut for later this month. The question is, by how much will the central bank cut borrowing costs? New data due out this week could provide a clue on that. The U.S. jobs report for August is due out Friday at 8:30 a.m. ET. Economists surveyed by Dow Jones expect the economy to add 162,000 jobs last month. On Tuesday, the Institute for Supply Management will release its index of manufacturing activity for August. Economists are forecasting a decline for the month. “The level of uncertainty all this creates presents both risks and opportunities for investors, in our view, requiring the courage of their convictions,” wrote John Stoltzfus, chief investment strategist at Oppenheimer Asset Management, in a note. “The good news, from our perspective, is that the Federal Reserve has made it pretty clear that it now plans to cut its benchmark interest rate sooner than expected, perhaps as early as the next FOMC meeting.” Elsewhere on Wall Street, Bernstein this morning raised his price target on Ferrari to $599 from $488, representing 20 percent upside. “With almost all Ferraris sold out, the rhythm of deliveries and revenue and profit recognition per quarter is entirely determined by Ferrari. Only the final level of personalization per vehicle is a small variable, as the customer can change their order until shortly before the actual build date,” wrote analyst Stephen Reitman.
We are in the middle of a nerve-wracking phase for the market
