The historically bullish month of April was able to eke out a gain last month. Now the worst six months of the year, historically, are up next. Here is a review of last month, along with a preview of May and beyond.
- The S&P 500 gained 0.3% for the month, which came on the heels of a 6.6% gain in March. April has now finished green in 10 of the past 11 years.
- Including last month, a month with a 6%+ gain has been followed by a positive month 11 of the last 13 times.
- Energy, materials, and financials were the top three sectors, while utilities and tech lagged last month.
- The incredible streak of 10 consecutive weeks with a higher weekly low for the S&P 500 ended last week.
- The month ended by going 12 straight days without a 1% move (up or down) and finished with only four 1% moves for the entire month. This came on the heels of just three 1% moves in March. Compare that with the 23 combined that took place during the first two months of 2016. Volatility has calmed down considerably.
- Since 1950, the S&P 500 in May is up 0.2% on average, which ranks it eighth out of the 12 months of the year. Only February, June, August, and September are weaker.
- Historically, May has started off firmly though, as the first trading session of May has been higher 69.2% of the time since 1990. Only the first trading session of July starts out higher more often.
- For the full month, the S&P 500 in May has gained during each of the past three years. Incredibly, the month of May was up for 13 straight years in the 1980s and 1990s.
- The May to October period kicks off the historically weaker six months of the year, as since 1950 these six months have returned an average of 1.3%, versus the November to October period of 7.1%.
- The normally strong November to April period was lower in 2015–2016 for the first time since 2009. The May to October period tends to be exceptionally volatile, so our outlook for a good deal of potential volatility the rest of this year could be in the cards.
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The economic forecasts set forth in the presentation may not develop as predicted.
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