Midterm Year Q4 Averages 5.5% Gains: Stovall Explains Where the Gains Usually Come From

What happened

Sam Stovall, chief investment strategist at CFRA, said on CNBC's "The Exchange" on Monday that fourth-quarter gains in midterm election years average about 5.5%. He advised investors to keep holding the third quarter's winners while stocks are under pressure.

Confirmed

Global impact / market context

If Stovall's average holds, investors who keep the third quarter's winners could capture a seasonal rebound in the final months of a midterm year. That matters because selling during pressure may lock in losses instead of waiting for the typical late-year recovery.

Analyst inference

Stocks are feeling pressure as Stovall spoke, which makes his advice to stay invested a bet against current nervousness. His view rests on historical midterm-year patterns, not on fresh company profits or economic data, so the outcome depends on whether this year follows the average.

Analyst inference

What to watch

1. Stovall advised investors to keep holding the third quarter's winners, so watch whether those same stocks lead any fourth-quarter rebound or continue to fall under pressure. Confirmed
2. Stovall's suggestion is a proposal, not a guarantee, so track whether CFRA or other strategists later revise the 5.5% average estimate or change the holding recommendation. Proposed
3. Watch whether stock pressure eases or deepens, because a continued decline would test whether the historical midterm-year fourth-quarter gain pattern still holds for this cycle. Analyst inference

Evidence

• beincrypto.com