Tempestuous March markets tend to drive prices up early in the month and batter stocks at month end. Julius Caesar failed to heed the famous warning to “beware the Ides of March” but investors have been served well when they have. Stock prices have a propensity to decline, sometimes rather precipitously, during the latter days of the month. In March 2020, DJIA plunged nearly 4012 points (-17.3%) during the week ending on the 20th.
March packs a rather busy docket. It is the end of the first quarter, which brings with it Triple Witching and an abundance of portfolio maneuvers from The Street. March Triple-Witching Weeks have been quite bullish in recent years. But the week after is the exact opposite, DJIA down 22 of the last 33 years—and frequently down sharply. In 2018, DJIA lost 1413 points (–5.67%). Notable gains during the week after for DJIA of 4.88% in 2000, 3.06% in 2007, 6.84% in 2009, 3.05% in 2011 and 12.84% in 2020 are the rare exceptions to this historically poor performing timeframe.
Normally a decent performing market month, post-election year payments to the Piper take a toll on March as average gains are trimmed noticeably (see accompanying Vital Statistics table). In post-election years March ranks: 5th worst for DJIA, S&P 500, and Russell 2000; NASDAQ is 4th worst. In 12 post-election years since 1973, NASDAQ has advanced six times, with three in a row 2009, 2013 and 2017.
Saint Patrick’s Day is March’s sole recurring cultural event. Gains on Saint Patrick’s Day have been greater than the day before and the day after. Perhaps it’s the anticipation of the patron saint’s holiday that boosts the market and the distraction from the parade down Fifth Avenue that causes equity markets to languish. Or maybe it’s the fact that Saint Pat’s usually falls in historically bullish Triple-Witching Week.
Whatever the case, since 1950, the S&P 500 posts an average gain of 0.27% on Saint Patrick’s Day (or the next trading day when it falls on a weekend), a gain of 0.05% the day after and the day before averages a 0.07% advance. S&P 500 median values are 0.17% on the day before, 0.23% on Saint Patrick’s Day and 0.03% on the day after. In the nine years when St. Patrick’s Day falls on a Wednesday, like this year, since 1950, the day before (Tuesday) produced an average gain of 0.28%, while Wednesday averaged 0.02% and Thursday averaged 0.34%.