Markets stabilize as seasonal headwinds shift to tailwinds
For the third quarter, the S&P 500® Index returned -3%, the weakest in a year, but still has a 13% year-to-date return. The behavior of the equity market has seen a subtle shift, with greater emotion and volatility in reaction to the Fed, rates, and inflation than at any point this year, with the VIX approaching 20 last week. Sentiment has also collapsed, with the AAII Sentiment Survey showing bulls collapsing to 28% after peaking above 50 in July, while bears are at 41%, nearly doubling in two months.