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A big finish for Wall Street on the last day of the month has seen the S&P 500 up around 3.5% for September, which is notoriously bad for stocks, though a few weeks back I did point out that election years can be different and tend to be more positive than non-election years.

And how come yesterday’s negativity has been replaced by overnight positivity? Well, let’s try some good news and a nice share price rebound for the drama-laden Deutsche Bank, with US regulators re-thinking their proposed $US14 billion fine!

Only in America would you get a fine that magnitude. And only in America would they think about saying “ah, forget about it!”

Sector-wise, semi-conductors were up 22%, Steel 13%, Exploration & Production 11%, Banks 10% but Gold was down 5%. This is a pattern any 24-carat gold optimist would love to see, with pro-growth stocks up and doomsday lovers and their beloved gold out of favour, though they have had a stellar year.

That said, gold will have another time glistening in the sun but let’s hope it’s at least a couple of years off when growth surprises in many economies on the high side and inflation comes back to town. Did I say I was an optimist? That’s what I’m hoping for. If, realistically, it’s no chance I will inform you of my change of thinking…but let’s not think about that for the moment.

I’m happier recalling that Wall Street is up 81% of the time in the fourth quarter since 1990. And we’re talking about a 4.5% rise for the S&P 500 on average, which is an important source of momentum for our market but I think we need to see the first US woman President to keep it positive post-November 8.

Back to Deutsche Bank and its share price was up 15%, following the rumour that the US Department of Justice fine would be recalculated to the downside, possibly as low as $5 billion. Analysts now think DB’s cash position makes it a different proposition to Lehman Brothers of 2008, which triggered the GFC crash. Experts argue that DB is no Lehman. I hope they’re right. The 0.8% rise of the S&P 500 overnight adds credibility to this argument.

Back home and we finished flat for the month but it was better than a slide and we weren’t helped by the DB nonsense yesterday, when the S&P/ASX 200 index slipped 0.65%. Looking back on the month, the comeback for resource stocks and commodity prices was heartening. If DB wasn’t such a worry, I’m sure financials would’ve done well yesterday and wouldn’t have been off 1.2% for the month.

Looking ahead, banks and resources offer me hope that our overall index can track higher in this more historically favourable quarter but we need the OPEC production cut agreement to hold and no President Donald Trump to report. That said, I think the race is close, with some pretty reliable election forecasters in the Trump camp.

I must add that while I like the OPEC agreement, I have to admit that I think the signatories look like some of the greatest, potential double-crossers of all time. I hope I’m wrong.

What I liked

• Australian job vacancies rose solidly in the three months to August, which is consistent with continued good jobs growth.
• The Mexican peso soared after the US presidential debate, which indicated that forex markets gave the head-to-head clash to Hillary.
• Central banks did nothing crazy on rates over the week.
• The numbers tell us that BHP Billiton and Rio Tinto were up 10.5% and 8.4% for the month.
• Given the stock prices now seem to track oil, I had to like this from Societe Generale, that the real significance was that OPEC and Saudi Arabia had returned to active management, making it riskier for investors to bet on significant falls in the oil price. (SMH)
• The Bank of Japan committed to pumping cash into the Japanese economy, until inflation rises above its 2% target and stays there. This is a gutsy play but those guys need something ballsy because their more cautious plays have been hopeless.
• US economic readings were positive, as AMP’s Shane Oliver noted: “US economic data was mostly better than expected. Consumer confidence rose to its highest level since 2007 in September (despite election uncertainty), the Markit services conditions PMI rose in September, resulting in overall business conditions continuing their rising trend, regional business conditions surveys rose, durable goods orders were stronger than expected, jobless claims remained low, the goods trade deficit narrowed, new home sales were stronger than expected and home prices continue to see modest growth.”
• Even Europe did well. Shane again: “Eurozone economic data was good with a rise in the German IFO business conditions survey to its highest since May 2014, a rise in overall Eurozone economic confidence to an eight month high and stronger growth in bank lending, all of which point to continuation of moderate economic growth at least.”
• On China: industrial profits rose 19.5% year-on-year in August, the Caixin manufacturing conditions PMI rose and consumer confidence spiked to the highest since June. These are good omens for Chinese economic growth.

What I didn’t like

• Private sector credit growth slowed in August, up only 0.4%, making the annual rise 5.8%, the worst pace for three years, though authorities have been trying to slow down home lending, which is happening.
• The Oz dollar at 76.59 US cents, though it’s better than the 77 US cents reading we saw earlier in the week. One expert is tipping an 80-something dollar before Christmas! He’s in a minority but the same guy likes gold, so he is a contrarian.
• A World Trade Organisation report downgrading its estimate for global trade growth to 1.7% this year from 2.8% and its prediction of five years of low or stagnant trade growth! How good are these guys at forecasting? Not very.
• Seeing DB’s share price down 45% for the year!

One other thing…

It’s grand final weekend for the AFL and NRL and I hope the Swans and Sharks salute the judge but as we recently bought a house in Melbourne, I’m feeling a little conflicted. I guess I’ll be able to find something positive if my teams lose but that wouldn’t surprise many of my loyal followers!

Top stocks – how they fared

The week in review

• Earlier this year I asked if it was time to buy the top 20 stocks. This week, I revealed how they’ve performed since then.
• James Dunn tipped four biotech stocks with potential.
• Charlie Aitken said “patience is a virtue” if you’re thinking of reinvesting your dividends, and explained why he’s taking profits in Southern Cross Media.
• Our Super Stock Selectors placed Domino’s in their likes list and Fortescue in their dislikes list.
• With a number of retailers copping a rough time, Tony Featherstone named three small-caps to watch in this sector as recovery strategies lift prospects.
• For yield-hungry investors, Geoff Wilson revealed five small- and mid-cap stocks to consider.
• The brokers upgraded carsales.com and South32 received a downgrade. In our second broker report, AGL was placed in the good books while Fortescue was out of favour.

What moved the market?

• Shares rose after OPEC agreed to strike a deal on oil output. Energy and mining stocks were the biggest winners.
• Share markets found confidence in Hillary Clinton’s performance in the first of three presidential debates.
• But some bad behaviour from Deutsche Bank put a sour note on shares. The US company regulators are slapping a $US14bn fine on the bank!

Calls of the week

• OPEC made the call to curb oil output for the first time since the GFC in 2008!
• Tony Featherstone said there are signs of hope for three retail turnarounds – Kathmandu Holdings (KMD), OrotonGroup (ORL) and McPherson’s (MCP).
• And nearly one-third of AGL shareholders voted against the company’s remuneration report – delivering a ‘’first strike’’ on executive pay. Two strikes can trigger a spill of the company board.

The week ahead

Australia

• Monday October 3 – Home value index (September)
• Monday October 3 – Performance of Manufacturing (Sep)
• Tuesday October 4 – Reserve Bank Board meeting
• Tuesday October 4 – Building approvals (August)
• Wednesday October 5 – Retail trade (August)
• Wednesday October 5 – New car sales (September)
• Thursday October 6 – International trade (August)

Overseas

• Monday October 3 – US ISM manufacturing (August)
• Tuesday October 4 – US Vehicle sales (September)
• Wednesday October 5 – US Trade balance (August)
• Wednesday October 5 – US ADP Employment change (September)
• Thursday October 6 – US Durable goods orders (August)
• Friday October 7 – US Non-farm payrolls (September)
• Friday October 7 – US Consumer Credit (August)

Food for thought

Don’t lower your expectations to meet your performance. Raise your level of performance to meet your expectations – Ralph Marston, US writer

Last week’s TV roundup

• Charlie Aitken from Aitken Investment Management joins Super TV to discuss the stock market, Telstra and more.
• The CEO of iSelect, Scott Wilson, joins the show to discuss a recent report and what’s next for the business.
• Nick Scali recently reported exceptionally well, so to discuss the growth of the business and what’s ahead, CEO Anthony Scali joins the show.
• There are a number of conflicting views on where the Aussie economy is heading. To share his insights, Chris Richardson of Deloitte Access Economics visits Super TV.
• Jacob Mitchell from Antipodes Partners discusses a new Listed Investment Company IPO, investing in a LIC, and the stocks and sectors he likes right now.
• And portfolio manager at Eley Griffiths, David Allingham, talks about his outlook for global financial markets and the stocks he likes.

Stocks shorted

ASIC releases data daily on the major short positions in the market. These are the stocks with the highest proportion of their ordinary shares that have been sold short, which could suggest investors are expecting the price to come down. The table also shows how this has changed compared to the week before.

This week, Estia Health was the biggest mover, with its short position increasing 2.37 percentage points on last week to 8.62%.

Charts of the week

Best consumer confidence reading in 11 weeks!

Consumer confidence is in the best shape it’s been in nearly three months according to ANZ/Roy Morgan. In the week to September 25, consumer confidence rose 4.4% to 120.6 and above the average of 112.6 since 2014.

Job vacancies at 4-year highs

Source: ABS

Job vacancies have jumped 4.5% in the three months to August to the highest level since mid-2012. Total job vacancies rose to 177,300 (seasonally adjusted), while private sector vacancies jumped 4.6% to 160,100.

Top five most clicked stories

• James Dunn: Four promising biotech stocks
• Peter Switzer: Contrarian with big name companies
• Tony Featherstone: Five small-cap stocks in the hunt for better returns
• Rudi Filapek-Vandyck: Buy, Sell, Hold – what the brokers say
• Geoff Wilson: Five small- and mid-cap dividend payers

Recent Switzer Super Reports

• Thursday 29 September: Be patient
• Monday 26 September: Contrarian play