This historic pattern factors to robust fourth quarter positive aspects — and 2020 could also be no exception

Ally Invest’s Lindsey Bell will not hand over on the fourth quarter.

Despite stimulus gridlock, election uncertainty and the coronavirus’ path, the agency’s chief funding strategist believes it is doable the S&P 500 will comply with the constructive historic pattern.

“There’s lots to fret about,” she informed CNBC’s “Trading Nation” on Friday. “But I’m cautiously optimistic.”

According to Bell, the S&P 500 sometimes sees a median acquire of three.9% within the fourth quarter — making it the very best three months of the yr.

“We can nonetheless have a great fourth quarter as soon as we get previous a few of these uncertainties which are within the market,” she stated. “So, whereas we might not get 3.9%, I’m going to attempt to stay cautiously optimistic right here.”

However, with simply 12 buying and selling days within the books within the fourth quarter, the S&P 500 is already up 3.6%. Bell factors out the majority of the positive aspects often are available in November and December, not October.

“Volatility goes to proceed to be a key element in by way of the subsequent couple months,” she added. “It’s a bit tough to blindly belief historic tendencies in a yr like this. We’re up in opposition to lots within the subsequent couple of months.”

One of the largest dangers she highlights is fallout from the coronavirus assist bundle delay.

“The query mark is what will occur on the fiscal aspect so far as stimulus or fiscal assist goes for the buyer,” stated Bell, a CNBC contributor.

So far, there seems to be little affect. The newest authorities information reveals September retail gross sales elevated 1.9% versus the 0.7% Dow Jones consensus estimate.

“Consumers have additionally put themselves in a greater monetary place that they have been going into the disaster by paying down some debt,” Bell famous. “So, I feel that customers are ready to climate the storm for a pair extra months. But in the end, fiscal assist goes to be wanted.”

Despite the dangers, Bell doesn’t suppose it is a dangerous time to enter the market. She speculates the financial restoration will proceed even when there are setbacks alongside the way in which.

“We are within the later phases, a minimum of I imagine, of the coronavirus disaster, and we’re nonetheless in constructive phases of the reopening story,” Bell stated. “I’m beginning to start to take a look at a few of these worth oriented sectors just like the financials… These are the fellows which are going to pop probably the most as a result of they’ve underperformed most importantly.”

She additionally likes small caps, that are additionally intently tied to financial efficiency.

“These two may be a bit bit early whereas we’re nonetheless determining what that financial story is and the way the financial trajectory performs out,” Bell stated. “But I’d slightly be in too early than too late.”

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