COTW: The July Rally

August 1, 2023COTW: The July Rally

  • The July Rally refers to the historically strong performance of U.S. large cap stocks in the month of July. Since 1920, July has been a top-performing month, and since 2010, there have only been two occurrences where July has not produced positive returns (in 2011, and 2014). On average, U.S. large cap stocks post returns of approximately 3.2% over July.
  • The July Rally once again seems to have held true for this year, with the S&P 500 on track to end the month up around 3.0%. The strength of this July has come from promising signs of U.S. inflation meaningfully cooling (3.0% year-over-year in June) and better-than-expected earnings reports from several companies. The University of Michigan consumer sentiment index also showed continued consumer optimism, as it continued to tick higher (to 71.6, the highest reading since December 2021) following the stock market rally.
  • The second half of the year has historically produced better returns than the first half. While we’ve seen strong U.S. large-cap stock performance year-to-date, it remains to be seen whether the S&P 500 can continue this momentum for the rest of the year.


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