What Are The Odds of A Stock Market Crash in Q4?

Steady Wealth Podcast

It's just not that easy to make money in the markets; it requires discipline."

These words resonate with self-directed investors who often find themselves underperforming the indices.

In the latest episode of The Steady Wealth Podcast hosted by Serge Berger, listeners are presented with a critical question:

"Could the stock market crash in the fourth quarter of 2023?"

Serge Berger begins by exploring the typical seasonal tailwinds that influence equities and risk assets in Q4, emphasizing the positive aspects and not predicting doom and gloom.

Berger delves into the seasonality of fund managers chasing high-performing assets to mark up their books at year-end.

He uses historical data to support the idea that the fourth quarter tends to be influenced by these factors.

However, he's cautious not to oversimplify and underscores that seasonality is not a guarantee, emphasizing the importance of considering the broader economic environment.

Berger then delves into key economic indicators, such as the yield curve and the Federal Reserve's rate policies.

He explains how a re-steepening yield curve can signal potential trouble for the equity market and why shifts in the Fed's stance matter.

Moreover, he points out that the slowing economy and geopolitical tensions are creating an increasingly complex situation.

The podcast addresses the performance of various sectors and tech stocks, highlighting the challenges and the weight of evidence suggesting a challenging time for the stock market.

Berger analyzes the performance of major stocks and indices over different time frames, revealing that the weight of evidence leans toward a more difficult period for investors in the fourth quarter.

While maintaining an open mind, the episode encourages listeners to consider the possibility of a market decline, emphasizing the importance of making informed decisions in a rapidly evolving economic landscape.