Index-level volatility picked up in September and by month-end the S&P 500 has experienced its first 5% drawdown in nearly a year. Beneath the surface, we’ve been seeing increasingly widespread and substantial pullbacks since early this year. More than 50% of NASDAQ stocks are more than 20% below their highs, and more than 20% are more than 50% below their highs. These percentages have been trending higher since February and reflect a market that has churned, corrected and seen a substantial amount of air come out of it since Q1. With the indexes themselves now catching down, Q4 could be when the average stock starts to get back in gear.
