Citadel Securities' Scott Rubner is telling investors to buy stocks now, arguing that September's market decline has reset valuations and positioned equities for a strong finish to 2024.
Rubner, a managing director at the Wall Street market-making firm, issued the call after the S&P 500's early-September selloff, which briefly erased more than 4% from the index before buyers stepped back in. The pullback followed a weak August jobs report and renewed concerns about slowing growth in China.
The recommendation carries weight because Citadel Securities handles roughly 25% of all U.S. equity trading volume, according to company data. When the firm's strategists shift positioning, institutional investors pay attention.
Rubner's case rests on three pillars. First, historical patterns: September has averaged a 1.2% decline for the S&P 500 since 1950, according to S&P Global data, making it the worst month of the year. October, November, and December have collectively averaged gains of 3.8% over the same period.
Second, positioning. Hedge fund net exposure to equities fell to its lowest level since January during the September dip, according to Goldman Sachs prime brokerage data. That means fewer investors are crowded into the same trades, reducing the risk of a sharp unwind.
Third, seasonal flows. Corporate buybacks typically accelerate in October as companies emerge from blackout periods, and pension funds rebalance toward equities at year-end. Both create mechanical buying pressure.
The S&P 500 has gained 19% year-to-date through September, driven largely by the Magnificent Seven technology stocks. But market breadth has been narrow, with the equal-weighted version of the index up only about 8%. Rubner's call implies that broadening participation could lift the average stock even if mega-cap tech stalls.
Not everyone shares the optimism. The Conference Board's consumer confidence index fell to 98.7 in September from 105.6 in August, the largest drop since August 2021. And the Federal Reserve's September meeting left rates unchanged at 5.25% to 5.50%, with Chair Jerome Powell saying the central bank is in "no rush" to cut.
Rubner has been early before. In November 2023, he correctly predicted a year-end rally that sent the S&P 500 up 16% over the following three months. But he also flagged in July 2024 that positioning had become stretched — a warning that preceded the August 5 selloff, when the index dropped 3% in a single session.
The stakes are high for retail investors, who hold a record 41.5% of their financial assets in equities, according to Federal Reserve data. For them, Rubner's message is simple: the September weakness was a buying opportunity, not a warning sign.
