The Bank of America recently published data indicating that the current period has initiated the S&P 500’s most robust 10-day interval of the year. This impressive trend, spanning over 96 years of historical data, underscores the market’s resilience and durability in the face of various economic challenges. In this article, we will explore the factors behind this notable pattern and analyze its implications for investors and the broader market perspective.
Historical Performance Trend:
Since 1928, the first week of July has consistently emerged as one of the most successful two-week periods for investors in the S&P 500 index. This index tracks the performance of the largest companies listed on American stock exchanges. According to Bank of America’s chief equity strategist, Stephen Suttmeier, this trend has held true over the past 96 years.
Current Market Status:
As of today, the S&P 500 has shown a 0.17% increase, with a remarkable 22.76% year-over-year growth, reaching an all-time high of 5,487 on June 18. While past performance does not guarantee future success, this trend has persisted for nearly a century, dating back to before the Great Depression. Given that this is a U.S. presidential election year, these gains may continue, following the historical pattern.
Seasonal Market Trends:
The first 10 days of July typically exhibit the strongest performance of the year for the S&P 500, with a 69% success rate and an average return of 1.54% (median return of 1.91%). Although not every year sees positive returns during this period, the majority of years have shown gains. The next best-performing period, based on annual averages since 1928, is the last 10 days of December, with a 1.17% average return and 0.96% median return.
Election Year Impact:
During presidential election years, the peak of returns may occur slightly earlier, with an average return of 1.59% as early as June. While there may be fluctuations in returns leading up to the election, the trend typically remains positive from early July through the summer months. Despite speculation about the impact of election outcomes on the stock market, historical data suggests that market performance is not significantly influenced by the winning candidate’s party affiliation.
Insights from Bank of America:
The insights presented in this article are derived from Suttmeier’s widely followed “Monthly Chart Portfolio of Global Markets,” a publication that analyzes market trends and provides strategic guidance to investors. Suttmeier’s extensive experience in the financial industry, including his tenure at Merrill Lynch and Bank of America, lends credibility to the findings highlighted in this analysis.
the current market trend indicates a positive outlook for investors, with historical data supporting the notion of a strong performance in the coming weeks. As investors navigate the complexities of the market, staying informed about these seasonal trends and historical patterns can help guide investment decisions and optimize portfolio performance.
