6 Sep

Why September Could Be Volatile for Financial Markets

WRITTEN BY Ricky Cove

Key events lined up for September

August was a volatile month, filled with economic, political, and geopolitical uncertainty. September could turn out to be another nail-biter for the financial markets.

The issues that rocked the markets in August, such as the North Korean missile tests and the US debt ceiling limit discussions, are set to continue. Additional uncertainty in the form of the European Central Bank’s QE tapering announcement and the Federal Reserve’s balance sheet reduction plans could keep investors on edge.

Why September Could Be Volatile for Financial Markets

Volatility is likely to remain high

Uncertainty in economic, political, and geopolitical issues can lead to higher levels of volatility (VXX) in the financial markets. In the last few weeks, a series of nuclear missile tests conducted by North Korea led to a sudden rise in volatility (VIXY).

These geopolitical risks, however, are being digested by markets very quickly and markets (SPY) generally return to normal in a few hours. Fears about North Korea should be a key issue for the markets in September, although the chances for escalated conflict could remain slim.

The other critical issue is the US debt ceiling limit increase, which will be up for debate in the coming weeks. This action could have a negative impact on the US equity (QQQ) and fixed income markets if both parties in the US Congress come to an agreement before the end of September.

Series overview

Throughout this series, we will discuss the key risks faced by the global financial markets in September. We’ll also explore how these risks could impact the bond (BND), currency, and equity markets.

Latest articles

US crude oil production has more than doubled since 2009 and grew by 1.1% over the last year. Currently, there are 133 operable refineries in the US.

The cannabis industry is fighting against the ongoing US-China trade war and recessionary worries, which have hurt valuations across the global market.

Higher revenues, increased ticket prices, and lower fuel costs are likely to drive American Airlines' Q3 earnings higher despite its Boeing MAX woes.

HEXO plans to report its Q4 earnings before the market opens on October 24. October has been tough for Hexo, with its stock falling 31.2% as of October 18.

Today, Advanced Micro Devices (AMD) rose 4% to over $32, making it one of the top Nasdaq gainers. Morgan Stanley raised its price target for AMD stock.

Early in 2019, President Donald Trump warned that China could overtake the US as a global power. He vowed that this would not happen under his leadership.