Is the lack of new listings dampening existing home sales?
What could surprise investors and be a positive market catalyst?
Excitement around AI, cash on the sidelines, and Apple’s (AAPL) rumored brand-new iPhone may be enough to buck September's usual downward trend.
AI hype fuels gains
AI excitement fueled the market’s rally this year, with shares of AI-related stocks including Nvidia (NVDA), Meta (META), and Microsoft (MSFT) among the market’s best performers.
And it’s not just tech players benefiting from the hype.
Companies across industries have jumped on the bandwagon by mentioning AI on earnings calls, highlighting how artificial intelligence can transform sectors including travel, healthcare, and manufacturing.
And come September, AI could offer a boost to investor sentiment, thanks to upcoming announcements from Microsoft, Meta, and Salesforce (CRM). Microsoft and Meta are both set to hold events in September to show off their latest innovations in artificial intelligence, while Salesforce is expected to further tout AI efforts at its annual Dreamforce conference.
"AI is probably not priced in," Spouting Rock Asset Management chief strategist Rhys Williams told Yahoo Finance about the opportunity to invest in artificial intelligence.
"The AI story is terrific right now.
We’re still in the early innings."
Artificial intelligence will likely be a theme at Goldman Sachs’ Communacopia & Technology Conference in September too, where leaders across telecoms, media, and technology could give insight on various AI investments.
Investors holding cash
More investors are holding cash or investing in cash-related products amid higher rates and uncertainty over the Fed’s path of monetary policy.
And excess cash could help the market regain momentum and drive further gains, one strategist said.
"With all of this fear, I think people are underestimating the amount of cash on the sidelines that has to play catch-up for underperformance in the first half of the year," Great Hill Capital chairman Thomas Hayes told Yahoo Finance.
The total assets in money market funds have risen dramatically this year, totaling US$5.57 trillion as of Aug. 23, according to the Investment Company Institute.
Apple’s upcoming product event
Apple’s run to US$3 trillion in market value earlier this year helped the Nasdaq 100 post a record first half of the year, and given the company’s dominance in equity markets, an impressive lineup of products could be a positive catalyst.
Apple’s next major product unveiling is set for September 12, 2023 at the tech giant’s headquarters in Cupertino, California.
And while Apple has not disclosed details, Wall Street is expecting the company to debut its iPhone 15 as well as new Apple watches.
"You see these small spikes of enthusiasm in the market," Allianz Investment Management head of ETF strategy Johan Grahn told Yahoo Finance.
"It might be a gadget, a prime product push."
Apple is under pressure to impress at its event. The tech giant snapped its seven-month win streak in August after iPhone sales declined for the third quarter in a row.
While only time will tell whether or not these factors will be enough to upend the well-known "September effect," they give investors reason to believe there’s a chance markets could surprise to the upside.
The lack of home sellers has been an Achilles heal for the existing home sales market in 2023, and while the absence of sellers has been widely discussed, the size of the gap and its implications for listing and existing sales for the year as a whole have been less widely covered.
Looking at year-to-date trends gives us a comparison over several years that is revealing.
So far in 2023, new listings have totaled 2.1 million.
This is 17.3% behind the previous worst year of 2020 and 29.0% behind the pre.pandemic average between 2017 and 2019 said Danielle Hale for Realtor.com
We show how equity Real Estate Investment Trusts, the world's best asset class, closed on Friday, September 1, 2023 with our optimized quant pooling index approach in dividing the index into four elements:
Fire: Our top 10 performers achieved a one day performance of 1.58% on Friday, September 1, 2023 with an average annual dividend yield of 10.69%
Water: Our 10 best mREIT components according to their dividend yields achieved a one day performance of 0.31% on Friday, September 1, 2023 with an average annual dividend yield of 15.47%
Earth: Our top 10 best mREIT components according to their market capitalization reached a one day performance of 1.14% on Friday, September 1, 2023 with an average annual dividend yield of 11.00%
Air: All our 38 mREIT components reached a one day performance of 0.47% on Friday, September 1, 2023 with an average annual dividend yield of 11.69%
The average dividend yield of our four elements of our mortgage Real Estate Investement Trusts is 12.21%
As US Inflation, from August 2022 to July 2023 was 3.2%, our average cash flow without inflation would have been +9.01%.
Our weighted mREIT ETN and ETFs reached a one day performance of 0.72% on Friday, September 1, 2023 with an average annual dividend yield of 13.98%.
We consider that the creation of individual prototype portfolios with our optimized quant pooling approach that includes all 38 elements of mortgage Real Estate Investment Trusts would outperform weighted mortgage Real Estate Investment Trusts Exchange-Traded Funds and mortgage Real Estate Investment Trusts Exchange-Traded Notes.
We also consider that decentralized real assets cooperatives that would be organized like the world's biggest asset management cooperative that is the Vanguard Group could help local commuity members to contribute to strongly compensate the risks of inflation and financial turmoil that the world suffers since the pandemics.
We wish you all a great and happy Tuesday!
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Lucas