Sam Dickie: Fisher Funds expert on equity markets taking a turn for September

Equity markets have taken a turn this September, and it's prompted concerns among experts.

Markets are softening a bit, which is a remarkably regular occurrence in September. 

Sam Dickie from Fisher Funds reveals what's going on.

LISTEN ABOVE

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:09):
You're listening to a podcast from News Talks'd be follow
this and our wide range of podcasts now on iHeartRadio.

Speaker 2 (00:16):
Now. Equity markets are making investors very nervous this September
markets are softening a bit, which is remarkably, remarkably regular,
regular occurrence actually in September, and Sam Dickey from Fisher
Funds is with us, say Sam.

Speaker 3 (00:28):
Hey have that. So what goes on in September, It
is quite astonishing. So if you go back sort of
twenty thirty or even one hundred years, September is by
far the weakest month in the US equity market. In fact,
over the last one hundred years, it is the only
month that is on average negative and the reasons are
actually pretty benign. So Northern Hemisphere money managers, so July

(00:50):
is the by far the strongest month of the year
on average, So when they go away on holiday, liquidity
drives up a bit and stop markets typically squeeze a
bit higher, and they come back from the summer break
all refreshed and look to clean up their portfolios. And
many of these guys have September year end, so they
clean out losers from their portfolily at a tiding them
up make them look good at September year end, driving

(01:11):
down stock prices, and part of it's probably self fulfilling,
which which seems silly, but investors sell to try and
get ahead of the September swoon, which brings on the
September swoon. But this year's weakness isn't just about this
calendar superstition. There are there are some real risks brewing
that have investors a little concerned, like what, well, first

(01:32):
intimate is elevated. So remember a few short months ago
you and I were talking about fear being the highest
in twenty five years. Now the market is quite exuberant,
which worries professional investors. So that's why number two is
markets are headline expensive. So the price to earnings multiple,
the PE ratio is twenty two times earnings, which is

(01:54):
pretty much the highest level in quarter of a century.
And the next six months should be tougher economically as
the rubber meets the road on inflation and growth from tariff.
So Home Depot put it most last week, it, like
many other US companies, have been been swallowing, been eating

(02:14):
the tariff cofts in pots imposts in their profit and
loss statements to date, as they wait and see where
teriffs will land. But the Home Depot said they'll look
to pass on these cost increases to consumers in the
second half, which will lift inflation and truncate growth. And
of course, the AI bubble is looking pretty inflated right now,
and the enthusiasm for AI stocks is just not being

(02:36):
matched by reality. It's not being matched by the revenue
use cases from real world use cases.

Speaker 2 (02:43):
So what does this all mean for investors?

Speaker 3 (02:46):
I think these are valid concerns. Not the September swimming,
by the way, not that superstitious thing, but I think
these are valid concerns, especially given how far the market
has moved. A couple of caveats. So the first one
is unlike in late twenty twenty one twenty two when
we last all that sort of headline pe multiple up
at that twenty two times and we saw a big

(03:09):
pullback in markets. The US Federal Reserve, the feed has
a ton of firepower this time to cut rates of
the economy soften. So remember back then, the Federal Reserve
benchmark rate which it uses to stoke or slow down
the economy was already near zero it's whereas today it's
at four and a half percent, so tons of room
to cut rates to CUSHNERI economic weakness.

Speaker 2 (03:30):
Yeah, brilliant stuff. Sam, it's good to talk to you.

Speaker 1 (03:32):
It always iss.

Speaker 2 (03:32):
We talk to you in a week's time. Sam Dickey
Official Funds.

Speaker 1 (03:35):
For more from News Talks at b Listen live on
air or online, and keep our shows with you wherever
you go with our podcasts on iHeartRadio