Stock Market Outlook: September 2023

Student loan payments restart in October. Also, new weight-loss drugs could boost some stocks.
Sam Taube
By Sam Taube 
Edited by Pamela de la Fuente

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September is back-to-school season for kids — and this particular September is back-to-paying-student-loans season for many adults. Is the stock market ready?

This month will also see a pivotal Fed meeting that could bring volatility to Treasury bond markets. And biotech investors will be waiting for news about a set of novel drugs that could make for powerful new weapons against the obesity epidemic.

Must-read: Student loan interest is back — could it move stocks?

After more than three years on hold, student loan interest will start to accrue again on Sept. 1, and payments will be due again in October. That’s bad news for borrowers — but what does it mean for financial markets?

The losers: Consumer discretionary stocks

Marguerita Cheng, a Maryland-based certified financial planner, says the resumption could hit some borrowers hard enough to affect their discretionary spending.

“People may cut back on streaming, or entertainment, or even savings,” she says.

There is some evidence that consumer discretionary stocks have been buoyed by the student loan interest pause. The Consumer Discretionary Select Sector SPDR Fund (XLY) has risen more than 60% since the pause began almost 2½ years ago.

The winners: Student loan stocks — maybe

Alexandrea Ravenelle, a sociology professor at the University of North Carolina, says student loan companies may benefit from the end of the pause.

“Any company that has shareholders and is in the student loan field is probably opening up the Champagne,” Ravenelle says.

She notes that SoFi (SOFI) — a bank with substantial student loan offerings — sued the Biden administration earlier this year to block its extension of the payment pause, arguing that it hurt its business. SoFi shares are down more than 50% since its 2021 IPO.

However, two other student loan stocks — Navient (NAVI) and Nelnet (NNI) — have had positive returns in the time since the pause began, and both had negative returns over the previous 2½ years.

So there may not be a clear way for investors to profit from the interest resumption.

But Cheng says there’s a clear takeaway for borrowers.

During the pause, she says she told clients, “Listen, I know you’re not required to make the payments, but what I want you to do is pretend you still have these payments. So pay yourself; build up that reserve.”

Term of the month: Ozempic (and Wegovy, Mounjaro and Saxenda)

No, these aren’t quite investing terms, per se. In fact, they’re not even real words — they’re drug names. Specifically, they’re trade names for four glucagon-like peptide-1 agonists (GLP-1 agonists).

If approved, these drugs could be game-changing for Americans who are struggling to lose weight — and for biotech investors.

What’s the deal with these weight loss drugs?

According to Dr. Deborah Counts, an endocrinologist at Sinai Hospital in Baltimore, the GLP-1 agonists are a class of drugs that were originally developed to treat diabetes. But they’ve also shown promise as weight loss aids.

“These drugs are very effective, more effective than any prior medications tried,” Counts said in an email interview. She noted, however, that GLP-1 agonists have some concerning side effects, and are typically only prescribed to people who have been unable to lose weight through diet and exercise.

Even with those qualifiers, the potential market for GLP-1 agonists is immense. Roughly 42% of Americans are obese, according to the Centers for Disease Control and Prevention.

So how can people invest in these drugs?

Novo Nordisk stock (NVO)

Novo Nordisk is currently the only biotech company that has GLP-1 agonists on the market for weight loss. Its drug Saxenda (liraglutide) has been approved by the Food and Drug Administration for weight loss since 2014, while Wegovy (semaglutide) has been approved for weight loss since 2021.

Both have list prices at more than $1,000 per month.

Novo Nordisk is also trying to retool another of its products — a drug called Ozempic that has been FDA-approved as a diabetes treatment since 2017 — as a weight loss drug.

Counts said that Ozempic’s approval for weight loss is “inevitable” given its similarity with the already-approved Wegovy. She also noted that it’s a bit cheaper — typically under $1,000. Ozempic has completed phase III clinical trials, but it’s unknown when it might be fully approved.

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Eli Lilly stock (LLY)

The other major player in the GLP-1 agonist industry is Eli Lilly & Co. (LLY), which has also been working on getting a diabetes drug FDA-approved as a weight loss drug.

Eli Lilly’s Mounjaro (tirzepatide) has been on the market as a diabetes treatment since 2022, and has received fast-track designation from the FDA as a weight loss drug. Fast-tracking speeds up the approval process, which Counts said is “likely to be sometime in 2023.”

Mounjaro typically costs between $900 and $1100.

Dates that could move markets this month

Economic events

  • The Bureau of Labor Statistics (BLS) will release its monthly employment situation summary Sept. 1.

  • The BLS will also release its monthly CPI report Sept. 13.

  • The Federal Reserve Bank of New York will release its four-month household spending survey Sept. 18.

  • The Federal Reserve Board of Governors will meet Sept. 19 and 20 to determine the new level of the federal funds rate. It will also release a new summary of economic projections.


  • Oracle (ORCL) will report earnings Sept. 11.

  • Adobe (ADBE) will report earnings Sept. 14.

Neither the author nor editor held positions in the aforementioned investments at the time of publication.

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