UBS: What Traders Should Be Watching In September

In a new report, UBS analyst Julian Emanuel previews what U.S. equity investors can expect during the month of September. According to Emanuel, it’s likely going to be a bumpy ride.

August recap
The month of August was one of the most eventful months in recent years. Emanuel points out that the stock market has been particularly scary during the late-summer months since 2007. In 2007 it was the Great Quant Meltdown, in 2011 it was the U.S. Debt Ceiling crisis, in 2012 it was the European Crisis, in 2013 it was the Taper Tantrum and now this year it has been China’s currency devaluation.

On top of China concerns, the S&P 500 now faces pressure from the Federal Reserve, which indicated its continued willingness to raise interest rates at the August Jackson Hole event.

September market-movers
Emanuel sees September as another major market-moving month with several major events on the schedule. The first key economic number due out is the U.S. unemployment number on 9/4. However, the most critical piece of new information will be the FOMC decision on interest rates on 9/17.

In addition, the U.S. presidential election cycle, Congress’ vote on the Iran deal and the fiscal budget and Greek elections on 9/20 could all influence stock prices.

Volatility remains
Until the dust settles from all of these upcoming news items, Emanuel says that volatility will continue to rule on Wall Street. The report includes a long-term chart of market volatility, which shows that volatility appears to have reached the end of one of its long-term cycles and could remain elevated for some time.


The iPath S&P 500 VIX Futures ETN VXX spiked 82 percent in the past month.