Despite predictions that the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) could experience a setback through September and October – which are traditionally the weakest performing months for the market – the index has started the month strong, setting yet another five-year high this morning.
The benchmark index soared to 5266.10 points, taking the total gains for the month so far to roughly 2.6%. Even more surprisingly, the market continues to climb despite strong indications that the US Federal Reserve will begin tapering off its bond buying program, although some analysts have suggested that these predictions have already been priced into the index.
Each of the major banks are trading higher today with National Australia Bank (ASX: NAB) leading the way with a 1.6% gain, whilst mining majors BHP Billiton (ASX: BHP) and Rio Tinto (ASX: RIO) are up 0.4% and 0.6%, respectively. Newcrest Mining (ASX: NCM) has been one of the biggest winners for the day, up 5% as gold moved 1.6% higher to $1329.40 an ounce.
Foolish takeaway
Whilst there is certainly a possibility that the market could react poorly to any announcement that the Fed will begin tapering, it will be a good sign for the long-term, resembling the Fed's belief that the markets will soon be able to support themselves more.
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Motley Fool contributor Ryan Newman does not own any of the companies mentioned in this article.
