The first week of July since 1928 was secretly probably the most successful two-week period for investors within the S&P 500 Index (SPX), which tracks the movement of the most important firms listed on American stock exchanges, research shows. published today by Bank of America’s chief equity strategist, Stephen Suttmeier.
The S&P 500 is up 0.17% today and 22.76% year-over-year, hitting an all-time high of 5,487 on June 18.
Of course, past performance is not any guarantee of future success, but this trend stretches back 96 years, dating back to before the Great Depression. With a U.S. presidential election this yr, these gains could last even longer, in response to the identical report – assuming, after all, that the past trend holds.
“The first 10 sessions of July are the strongest of the year, with the SPX up 69% of the time and an average return of 1.54% (median 1.91%),” the report says. That implies that while not yearly during that period was a winning yr, it was up 69% of the time.
The next highest return based on yearly averages since 1928 is the last 10 sessions in December, which produced a mean return of 1.17% and a median return of 0.96%. Trades are positive about 72% of the time. The average return of all sessions in the course of the yr is 0.25%, in response to the report, with the typical of all medians being 0.54%.
In years with presidential elections, average returns may peak just a little earlier, with the typical return reaching 1.59% as early as June before declining toward the tip of the month, but then rising sharply again in July and continuing throughout the summer.
“The last ten sessions in June may take a break,” the report said. “But the early July and early August periods show solid 10-day seasonality in presidential election years.”
While the election cycle can affect returns within the two-week periods, Shawn Snyder, executive director and global investment strategist at JP Morgan, said in May said There is little evidence to support the “widespread belief” that if a specific candidate wins the election, “the stock market will crash.” A Morgan Stanley report shows that stock markets deliver a mean total return of 11.28% in election years, 15.3% in years when a Republican is elected, and seven.6% in years when a Democrat is elected.
Bank of America’s results come from Suttmeier’s widely read Monthly Chart Portfolio of Global Markets. Suttmeier has worked at Merrill Lynch for 17 years and joined Bank of America in 2008 when it bought the asset management company.
