Stock Market Risks October Sell-off

Ever wonder why there have been so many October sell-offs? There are two reasons:

• First, economists focus on the economy’s behavior over time, seasonally adjusting everything that has an annual cycle. That means higher growth periods get trimmed and lower growth periods get a boost.
• Second, investors get whipsawed when companies report 3rd quarter financial results (that are not seasonally adjusted). The 2nd quarter earnings reports looked better than the economy results indicated, and now the 3rd quarter earnings will look worse.

And those 3rd quarter earnings reports begin in October.