UBS: What Traders Should Be Watching In September

In a new report, UBS analyst Julian Emanuel previewed what U.S. equity investors can expect during the month of September. According to Emanuel, its likely going to be a bumpy ride.

August Recap

The month of August was one of the most eventful months in recent years. Emanuel pointed out that the stock market has been particularly scary during the late-summer months since 2007.

In 2007, it was the Great Quant Meltdown; in 2011, it was the U.S. Debt Ceiling crisis; in 2012, it was the European Crisis; in 2013, it was the Taper Tantrum and now this year it has been Chinas currency devaluation.

On top of China concerns, the S&P 500 now faces pressure from the Federal Reserve, which indicated its continued willingness to raise interest rates at the August Jackson Hole event.

September Market-Movers

Emanuel sees September as another major market-moving month with several major events on the schedule. The first key economic number due out is the U.S. unemployment number on Friday. However, the most critical piece of new information will be the FOMC decision on interest rates on September 17.

In addition, the U.S. presidential election cycle, Congress vote on the Iran deal and the fiscal budget and Greek elections on September 20 could all influence stock prices.

Volatility Remains

Until the dust settles from all of these upcoming news items, Emanuel says that volatility will continue to rule on Wall Street. The report included a long-term chart of market volatility, which illustrated that volatility appears to have reached the end of one of its long-term cycles and could remain elevated for some time.

The iPath S&P 500 VIX Short Term Futures TM ETN (NYSE:VXX) spiked 82 percent in the past month.

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