• Home
  • News
  • Personal Finance
    • Savings
    • Banking
    • Mortgage
    • Retirement
    • Taxes
    • Wealth
  • Make Money
  • Budgeting
  • Burrow
  • Investing
  • Credit Cards
  • Loans

Subscribe to Updates

Get the latest finance news and updates directly to your inbox.

Top News

Using Legal Authority Over An Aging Parent

July 11, 2025

Ford Recalls 850,000 Vehicles: What It Means for Your Safety and Your Finances

July 11, 2025

Mark Cuban Says AI Will Mint a Trillionaire. Start Your Climb Here

July 11, 2025
Facebook Twitter Instagram
Trending
  • Using Legal Authority Over An Aging Parent
  • Ford Recalls 850,000 Vehicles: What It Means for Your Safety and Your Finances
  • Mark Cuban Says AI Will Mint a Trillionaire. Start Your Climb Here
  • This Former NFL Player Built a Brand Around Nasal Breathing
  • What My First Failed Startup Taught Me — and How I Finally Got It Right 20 Years Later
  • The Best Domains Are Gone — Here’s How Savvy Founders Still Snag Them
  • Why Your Old Marketing Tactics Are Killing Your Growth in 2025
  • Mortgage rates tick higher for first time in weeks
Friday, July 11
Facebook Twitter Instagram
FintechoPro
Subscribe For Alerts
  • Home
  • News
  • Personal Finance
    • Savings
    • Banking
    • Mortgage
    • Retirement
    • Taxes
    • Wealth
  • Make Money
  • Budgeting
  • Burrow
  • Investing
  • Credit Cards
  • Loans
FintechoPro
Home » Stock Market Risks October Sell-off
Investing

Stock Market Risks October Sell-off

News RoomBy News RoomAugust 5, 20231 Views0
Facebook Twitter Pinterest LinkedIn WhatsApp Reddit Email Tumblr Telegram

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.

How significant are the seasonal swings?

Enough to make a sizable difference in company results. Below are some major economic indicators unadjusted, showing what really happened. Note the sizable 2nd quarter growth numbers, followed by low or nil 3rd quarter results.

The 2020 2nd quarter results reflect the Covid-19 shutdowns, followed by the initial rebound in the 3rd quarter. Throughout 2021 and 2022, results were affected by rebound continuations. This year appears to have normal moves, meaning we can expect the 3rd and 4th quarters to reflect the pre-Covid seasonal moves.

What may be surprising is that 2nd quarter growth typically exceeds the 4th (holiday) quarter. Moreover, 1st quarter growth is significantly negative. These dynamics are lost by examining only seasonally-adjusted numbers.

Gross Domestic Product (GDP)

The graph shows the quarterly percentage change from the previous quarter (annualized because that is the usual presentation statistic).

Retail Sales (including online)

The graph shows the quarterly percentage change from the previous quarter (not annualized).

Employees

The graph shows the quarterly percentage change from the previous quarter (not annualized).

The bottom line: 3rd quarter has another problem for companies

Companies jumped on the price increase bandwagon when inflation bumped up two years ago. At first, they explained that shortages, shipping delays and suppliers’ price rises made them do it. Then, as in the past, when inflation became expected, the price raising became a company strategy, even as the previous rationales evaporated.

However, at some point two important groups undermine the price raising strategies.

  • Buyers (businesses and consumers) take action, making changes to lower and/or better control prices paid
  • Labor (employees and unions) make demands for higher wages and salaries

Obviously, both actions (which are happening now) eat into company revenues and profits. Can companies then raise prices further to maintain profit margins? Yes, until the revenue decline offsets the pricing gains.

We’re at that point now, and the 3rd quarter growth slowdown could aggravate the situation. So, when companies start reporting 3rd quarter financials in October (!), the stock market could be in for rocky times at best, more likely a sell-off.

A nagging concern: “Could the stock market crash?”

Yes, it’s possible – perhaps even probable because it seems so unlikely to most investors. But whichever, sell-off or crash, neither will be a new bear market. That’s because the recent stock market rise is being driven by many (most?) of the previous bull rationales and favorites (even including SPACs and Meme stocks). There is no valid reason for that lightening striking twice. So, it means we have not yet seen a true washout of the last bull stock market.

Read the full article here

Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Articles

What My First Failed Startup Taught Me — and How I Finally Got It Right 20 Years Later

Investing July 10, 2025

He Went From Customer to CEO of 16 Handles

Investing July 9, 2025

Barbara Corcoran Retains Staff With Wild Perks, No Turnover

Investing July 8, 2025

Jack Dorsey Announces Bitchat Messaging App

Investing July 7, 2025

101 Small Business Ideas to Match Your Personality, Investment, Skills & Goals

Investing July 6, 2025

How to Deal With Negative Articles on Google

Investing July 5, 2025
Add A Comment

Leave A Reply Cancel Reply

Demo
Top News

Ford Recalls 850,000 Vehicles: What It Means for Your Safety and Your Finances

July 11, 20250 Views

Mark Cuban Says AI Will Mint a Trillionaire. Start Your Climb Here

July 11, 20251 Views

This Former NFL Player Built a Brand Around Nasal Breathing

July 10, 20250 Views

What My First Failed Startup Taught Me — and How I Finally Got It Right 20 Years Later

July 10, 20250 Views
Don't Miss

The Best Domains Are Gone — Here’s How Savvy Founders Still Snag Them

By News RoomJuly 10, 2025

Entrepreneur Getting a premium domain isn’t just a branding decision — it’s a strategic asset.…

Why Your Old Marketing Tactics Are Killing Your Growth in 2025

July 10, 2025

Mortgage rates tick higher for first time in weeks

July 10, 2025

Social Security & The Big Beautiful Bill

July 10, 2025
Facebook Twitter Instagram Pinterest Dribbble
  • Privacy Policy
  • Terms of use
  • Press Release
  • Advertise
  • Contact
© 2025 FintechoPro. All Rights Reserved.

Type above and press Enter to search. Press Esc to cancel.