Seasonal Strategies

Strong Starts & Weak Mays: A June Boon

Previous analysis of big gains the first four months indicated weakness was in store for the merry month of May. Now that the market has indeed suffered this May the outlook for June is a boon at least historically speaking.

The table below shows the top 20 first four month gains for the for the S&P 500 with the subsequent changes for May, June, Rest of the Year, “Worst Six Months” May-October, 2nd half July-December and full year performance. While most of the full year gains are clearly logged in these big first-four-month gains, there still upside to be had in the latter part of the year.

May is weakest and May 2019 has delivered market declines so far, down -4.9% for the S&P 500 as of today’s close. However, after big starts, 7 of the 9 subsequent May declines were followed by big gains in June (highlighted in green). So, while we do not anticipate much upside over the next 5 months or so, June is set up for a boon.

Strong Starts - S&P 500 Performance After Top 20 Gains 1st 4 Months Table