With the Jackson Hole meeting now concluded, and the September 20-21 FOMC meeting within reach, debate rages over the expected magnitude of the next rate hike, observes Sam Stovall, chief investment strategist for CFRA Research, in the firm's flagship newsletter, The Outlook.

Action Economics (AE) predicts a 50 basis point increase in September, followed by two 25 bps hikes to round out the year. One reason for this comparatively dovish stance is the predicted rapid slowdown in the pace of inflation.

Indeed, AE sees the December-over-December growth in headline CPI at 6.1% for 2022 and 2.5% for 2023, while the Dec/Dec GDP growth forecast improves from 0.4% for 2022 to 1.7% for 2023.

Of course the year-end and year-ahead projections won’t alter the traditional decline in equity prices and increase in volatility in September. The S&P 500 posted the worst average monthly price change in September, joining February as the only two months to record declines.

Yet September stands alone as the only month in which the market fell more frequently than it rose. Its average volatility was also above average.

Even though 45% of the 11 sectors in the S&P 1500 recorded greater than 50% frequencies of advance (FoA) in September, along with 57% of the 129 sub-industries that have been around for at least 15 years, the highest readings came from the energy, health care, and utilities groups.

Representative companies from this list of S&P 1500 sub-industries with the highest FoAs are: Crocs (CROX), Allstate Corp. (ALL), Darden Restaurants (DRI), Best Buy (BBY), Cooper Cos. (COO), Procter & Gamble (PG), Consolidated Communications (CNSL), and MetLife (MET).

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