{"id":13487,"date":"2024-10-28T13:28:20","date_gmt":"2024-10-28T13:28:20","guid":{"rendered":"https:\/\/zacksim.com\/blog\/?p=13487"},"modified":"2024-10-28T13:28:20","modified_gmt":"2024-10-28T13:28:20","slug":"3-key-factors-that-may-impact-q4-returns","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/3-key-factors-that-may-impact-q4-returns\/","title":{"rendered":"3 Key Factors That May Impact Q4 Returns"},"content":{"rendered":"\n

3 Factors That Could Impact Fourth Quarter Returns<\/strong><\/p>\n\n\n\n

U.S. stocks have delivered a banner year, with solidly positive returns registered across the size and style spectrum. The question is, what will the final two months of the year bring?<\/em><\/p>\n\n\n\n

Short-term returns are unpredictable. But I do have three factors I think could impact markets in this final stretch. Readers will note that the Federal Reserve is not one of them. In my view, the monetary policy factor is largely baked into stock prices, as there is no expectation that rates will move higher at the next two meetings.1<\/sup><\/p>\n\n\n\n

Setting the Fed and monetary policy aside for a moment, here are three year-end factors to keep in mind.\u00a0<\/p>\n\n\n\n

1. U.S. Elections<\/strong><\/p>\n\n\n\n

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    The stock market does not like uncertainty, which makes U.S. presidential election years more vulnerable to volatility flare-ups. History shows a fairly consistent pattern. Stocks have been choppy in the weeks leading up to election day, then settle\u2014and often rally\u2014once the result is known. Indeed, the CBOE Volatility Index\u2014also known as the VIX\u2014tends to be higher (on average) in late October and early November in election years, versus non-election years.2<\/sup> <\/p>\n\n\n\n

    Given the tightness of the race and an overall process that could be more drawn-out than previous cycles, we might reasonably expect historical volatility trends to apply to November. But I do not think this alone should alter an investor\u2019s positioning or outlook, which based on earnings and economic fundamentals remains constructive.<\/p>\n\n\n\n

    Download Our Market Insights: October Stock Market Outlook Report<\/a><\/u><\/strong><\/p>\n\n\n\n

    As the election approaches, it\u2019s easy to let emotions sway your investment choices. While market volatility can create uncertainty, it also brings opportunities.<\/p>\n\n\n\n

    Our latest October Stock Market Outlook Report3<\/sup> <\/a><\/u><\/em><\/strong>is designed to help investors focus on the fundamentals. It includes valuable insights like:<\/p>\n\n\n\n