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Sam Dickie: Fisher Funds expert on equity markets taking a turn for September · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks'd be follow
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  Speaker 2: Now. Equity markets are making investors very nervous this September
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  Speaker 2: markets are softening a bit, which is remarkably, remarkably regular,
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  Speaker 2: regular occurrence actually in September, and Sam Dickey from Fisher
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  Speaker 2: Funds is with us, say Sam.
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  Speaker 3: Hey have that. So what goes on in September, It
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  Speaker 3: is quite astonishing. So if you go back sort of
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  Speaker 3: twenty thirty or even one hundred years, September is by
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  Speaker 3: far the weakest month in the US equity market. In fact,
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  Speaker 3: over the last one hundred years, it is the only
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  Speaker 3: month that is on average negative and the reasons are
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  Speaker 3: actually pretty benign. So Northern Hemisphere money managers, so July
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  Speaker 3: is the by far the strongest month of the year
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  Speaker 3: on average, So when they go away on holiday, liquidity
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  Speaker 3: drives up a bit and stop markets typically squeeze a
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  Speaker 3: bit higher, and they come back from the summer break
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  Speaker 3: all refreshed and look to clean up their portfolios. And
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  Speaker 3: many of these guys have September year end, so they
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  Speaker 3: clean out losers from their portfolily at a tiding them
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  Speaker 3: up make them look good at September year end, driving
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  Speaker 3: down stock prices, and part of it's probably self fulfilling,
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  Speaker 3: which which seems silly, but investors sell to try and
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  Speaker 3: get ahead of the September swoon, which brings on the
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  Speaker 3: September swoon. But this year's weakness isn't just about this
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  Speaker 3: calendar superstition. There are there are some real risks brewing
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  Speaker 3: that have investors a little concerned, like what, well, first
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  Speaker 3: intimate is elevated. So remember a few short months ago
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  Speaker 3: you and I were talking about fear being the highest
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  Speaker 3: in twenty five years. Now the market is quite exuberant,
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  Speaker 3: which worries professional investors. So that's why number two is
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  Speaker 3: markets are headline expensive. So the price to earnings multiple,
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  Speaker 3: the PE ratio is twenty two times earnings, which is
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  Speaker 3: pretty much the highest level in quarter of a century.
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  Speaker 3: And the next six months should be tougher economically as
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  Speaker 3: the rubber meets the road on inflation and growth from tariff.
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  Speaker 3: So Home Depot put it most last week, it, like
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  Speaker 3: many other US companies, have been been swallowing, been eating
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  Speaker 3: the tariff cofts in pots imposts in their profit and
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  Speaker 3: loss statements to date, as they wait and see where
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  Speaker 3: teriffs will land. But the Home Depot said they'll look
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  Speaker 3: to pass on these cost increases to consumers in the
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  Speaker 3: second half, which will lift inflation and truncate growth. And
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  Speaker 3: of course, the AI bubble is looking pretty inflated right now,
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  Speaker 3: and the enthusiasm for AI stocks is just not being
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  Speaker 3: matched by reality. It's not being matched by the revenue
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  Speaker 3: use cases from real world use cases.
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  Speaker 2: So what does this all mean for investors?
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  Speaker 3: I think these are valid concerns. Not the September swimming,
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  Speaker 3: by the way, not that superstitious thing, but I think
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  Speaker 3: these are valid concerns, especially given how far the market
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  Speaker 3: has moved. A couple of caveats. So the first one
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  Speaker 3: is unlike in late twenty twenty one twenty two when
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  Speaker 3: we last all that sort of headline pe multiple up
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  Speaker 3: at that twenty two times and we saw a big
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  Speaker 3: pullback in markets. The US Federal Reserve, the feed has
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  Speaker 3: a ton of firepower this time to cut rates of
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  Speaker 3: the economy soften. So remember back then, the Federal Reserve
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  Speaker 3: benchmark rate which it uses to stoke or slow down
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  Speaker 3: the economy was already near zero it's whereas today it's
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  Speaker 3: at four and a half percent, so tons of room
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  Speaker 3: to cut rates to CUSHNERI economic weakness.
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  Speaker 2: Yeah, brilliant stuff. Sam, it's good to talk to you.
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  Speaker 1: It always iss.
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  Speaker 2: We talk to you in a week's time. Sam Dickey
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  Speaker 2: Official Funds.
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