Welcome to September on Wall Street, the worst month of the year for investors. According to the Hulbert Digest, this is the worst month of the year for stocks with an average annual decline of 1.24 percent since 1896. However, in presidential election years the drop is just 0.28 percent. With that said, it is important to realize we are having a heck of a good year on Wall Street. Through the first eight months of 2012 the Nasdaq Composite is up 17.7 percent and the S&P 500 has gained 11.8 percent. The Dow Industrials have been the laggard, up a respectable 7.1 percent. Over the years it has not been unusual to see the September swoon be followed by a significant fourth-quarter rally, although that seems hard to grasp in light of the very contentious election campaigns and the specter of the fiscal cliff.
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August was a record setting month for dividends. According to Howard Silverblatt of S&P, companies distributed $34 billion to shareholders, topping the previous one-month record of $32.1 billion in November 2011.
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Get ready for a slew of employment reports due out this week. Thursday brings the Challenger report on announced layoffs, the ADP report on civilian payrolls and the DOL weekly update on initial claims for jobless benefits. That will all be followed on Friday -- the day after the end of the DNC -- by the official government report on August employment, including changes in payrolls and the jobless rate.
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Never underestimate the impact of housing on other sectors of the economy. For instance, a report out this morning from UBM Global Trade finds containerized imports rose by 9.7 percent in July as a 2.6 percent increase in existing home sales spurred an 8 percent increase in furniture imports, the largest containerized commodity. Also, imports of auto parts also increased by an impressive 25 percent as auto sales continue to move higher.
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Never mind all the pundits on TV telling you who will win the elections in November. An amazingly accurate election indicator is based on consumer activity. In particular the "Spirit Halloween Presidential Index" measures the sales of masks for Mitt Romney and Barack Obama. The results of the poll will be released after Halloween and just days before the election. It has accurately predicted the winner of the past four presidential elections. Spirit Halloween is a retailer that opens stores all across the country to sell costumes and other items for the holiday. The retailer will also team up with Rock the Vote to encourage people to register to vote when they visit any of the stores.
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However, the best economic indicator this week may be the Visa report on Tooth Fairy spending. It shows the Fairy is leaving an average of $3 per tooth this year, an increase of 15 percent over 2011. The report finds 3 percent of children receive less than a dollar, down from 7 percent last year. At the same time, 8 percent of kids get more than $5 per tooth, up from just 3 percent last year. I must admit the Chamberlin grandchildren are skewing the numbers sharply higher.
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Tiger Woods finished the Deutsche Bank Championship yesterday in third place behind winner Rory McIlroy. For his efforts, Tiger picked up $544,000, a nice payday and enough to push his career winning over $100 million, the first professional golfer to top the mark. It is unlikely any other pro will be joining him soon above that threshold. The closest competitor is Phil Mickelson with slightly more than $60 million in career winnings.
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Sunday was not a good day for Charley Hoffman, the pro from Poway who almost blew it on the back nine and barely held on to make it to the third round of the FedExCup. Charley was cruising along, actually in competition for the lead at one time, before carding a quadruple bogey -- a seven on a par three. That was on the 11th hole and he was all over the course coming in, barely holding on to stay among the top 70 players to move forward in the chase for a $10 million prize. He finished at number 69. Commentator Johnny Miller said it was one of the biggest collapses by a player he has ever seen. But, Charley will still be playing next week, something most professional golfers will not be doing.
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