COTW: Seasonal Strength?

June 27, 2023COTW: Seasonal Strength?

  • The S&P 500 is up 13.5% year-to-date, and up more than 20% since the October 2022 lows. The first half of this year has been anything but ordinary—characterized by a banking sector in March, a widespread acceleration in AI adoption and interest in May, and the recent rally of the S&P 500 into a bull market. When looking at historical returns since 1928, the S&P 500 could be entering into a period of seasonal strength over the next couple of months.
  • The average monthly returns of the S&P 500 provides compelling evidence of some months outperforming others. For example, as shown by the chart on the right, September historically is the worst-performing month (down 0.7%) while July is the best-performing month (up 2.0%). The second half of the year historically has produced better returns compared to the first half. However, whether or not this will hold true in the current economic environment remains to be seen.
  • As famous writer Mark Twain once said: “October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August, and February.”


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