July historically is the best performing month of the third quarter. This strength inevitability stirs talk of a “summer rally”, but we must beware of the hype, as summer has historically been the weakest rally of all seasons. Are US election years any different?
The month of June ranks near the bottom of all months for most of the US indexes. Expect volatility during the third week. After that it tends to only get worse.
The best six months of the year for certain US stock indexes has ended. A defensive stance is warranted as the summer months arrive.
The US stock market in May used to perform buch better than it has in recent years. Still, there is generally a bullish bias in certain stock sectors.
May trading during US election years is generally weak. Caution is warranted, especially in the second half of the month.
So far, April has regained some of this years losses – in fact the NASDAQ is again positive for 2020.
What should investors do now that markets are entering the weakest period of the year? How bad could this year be, actually?
Usually at this time of the year, early-April, stock markets would have had a nice seasonal rally. Well, there is nothing usual about the market or the economy this time.
As of today, the new bear market closing lows were on March 23. From their highs DJIA was down 37.1% and S&P 500 was down 33.9%.
Since then the market has rebounded to trim those losses.
Now we look to position for the worst months of the year ahead.
Everyone seems to be hoping for the stock market to find support here, already so much damage has been done.
A great deal of uncertainty remains for the world economy and health crisis. April looks like a good time for a bear market bounce.
Further out, investors should experience a rough ride in the market this year with quite a bit of choppy trading.
One of the fastest and most furious declines in stock market history has taken place . While similar declines have occured, they did not come as rapidlynor straight off a new all-time high. we cannot know if we have hit bottom yet – bottoms are only visible with a bit more hindsight. So speculating on the timing of a rebound, rally and recovery needs some leadership response.
Unlike weather and the biblical tales, stock markets in March usually start with stability and turn wild with volatility towards the end.
Large Cap stocks make up most of the gains this year, far outpacing smaller stocks. A reversal of this trend could come soon, in March even.