Deutsche Bank-Thematic Research Monthly Chartbook At the crossroads-110267048

Jim Reid Head of Global Economics & Thematic Research(+44)-20-7547-2943jim.reid@db.comHenry AllenMacro Strategist(+44)-20-7541-1149henry-f.allen@db.comRajsekhar Bhattacharyyarajsekhar-a.bhattacharayya@db.comIMPORTANT RESEARCH DISCLOSURES AND ANALYST CERTIFICATIONS LOCATED IN APPENDIX 1. MCI (P) 041/10/2023. UNTIL 19th MARCH2021 INCOMPLETE DISCLOSURE INFORMATION MAY HAVE BEEN DISPLAYED, PLEASE SEE APPENDIX 1 FOR FURTHER DETAILS.At the crossroadsSeptember 2024Deutsche Bank ResearchImage created by DALL-EDistributed on: 10/09/2024 12:43:09 GMT7T2se3r0Ot6kwoPaResearchDeutsche BankJim Reid | (+44) 20 7547 2943 | jim.reid@db.comSectionPage1.We’re in the seasonally weak part of the year…022.After much anticipation, it looks like the Fed will finally cut rates for the first time since March 2020… but when the Fed starts cutting, what happens next…?063.When the Fed starts cutting, what happens next…?164.The pivot to rate cuts has come amidst a deteriorating employment situation… BUT is it a normalisation or the start of a bigger trend?325.The other theme in markets right now is the Great Rotation…446.The next major event (that we know about) is the US Presidential Election on November 5…507.Was early August just a bad dream?571AttributionThe authors wish to acknowledge the contributions made by Rajsekhar Bhattacharyya, employee of Acuity Knowledge Partners, a third-party provider to Deutsche Bank in the preparation of this report.Table of ContentsResearchDeutsche BankJim Reid | (+44) 20 7547 2943 | jim.reid@db.comWe’re in the seasonally weak part of the year…2ResearchDeutsche BankJim Reid | (+44) 20 7547 2943 | jim.reid@db.comUsing data since 1928, we are now in a seasonally soggy patch for the S&P 500…Average S&P 500 performance through the year since 1928...3Source: Bloomberg Finance LP, GFD, Deutsche Bank100101102103104105106107108JanFebMarAprMayJunJulAugSepOctNovDecOct. 27thSept 2ndResearchDeutsche BankJim Reid | (+44) 20 7547 2943 | jim.reid@db.comSeptember has been the worst month for the S&P 500 since 1928, the only month where it’s been lower more than higher over 95 years… It’s also been lower in all of the last four years...Monthly average and median S&P performance..4-1.5%-1.0%-0.5%0.0%0.5%1.0%1.5%2.0%Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecAverage-1.0%-0.5%0.0%0.5%1.0%1.5%2.0%Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecMedianSource: Bloomberg Finance LP, GFD, Deutsche BankResearchDeutsche BankJim Reid | (+44) 20 7547 2943 | jim.reid@db.comSeasonals this year will also collide with usual sideways to lower move in the weeks ahead of tight elections. So far this remains a tight one... More on the election later...S&P 500 around close Presidential elections (mean, 5d ma)5100102104106108110112114JanFebMarAprMayJunJulAugSepOctNovDecElection DayIndexNote: *elections in 1952, 1968, 1976, 2004, 2012 and 2016; excludes recession years 1960, 1980, 2000 and 2008Source: S&P, DB Global Asset Allocation, Deutsche BankResearchDeutsche BankJim Reid