When Will The Bullish April Seasonality Start?

Hard to believe it, but in a few days, April will be half over. As we noted at the start of the month, April has historically been one of the best performing months for the S&P 500 Index. In fact, over the past 20 years, it has been the strongest month of the year.

Per Ryan Detrick, Senior Market Strategist, “As strong as April has been in the past 20 years, here’s the catch—most of the gains have tended to occur in the second half of the month. In fact, as of April 14, the S&P 500 has been up only 0.2% on average, yet has finished up 2.0% by month end. In other words, the slow start to April in 2017 is perfectly normal, and history would suggest a bounce over the second half of the month is potentially still in play.”

Big picture, the S&P 500 continues to cling to support from its upward sloping 50-day moving average, barely closing above this trendline yesterday (April 11, 2017) for the 105th consecutive trading session—the longest streak in six years. The CBOE Volatility Index (VIX), meanwhile, closed above the 15 level (versus a median of 14.6 since the start of 2012) for the first time since the day after the U.S. election, suggesting some fear over geopolitical concerns could be creeping into the markets. To wrap it all up, consensus expectations are for earnings to have their best quarter since late 2011, and this could help to justify the big rally since the election. However, it’s likely to be anything but a smooth ride as volatility potentially heats up.

IMPORTANT DISCLOSURES

Past performance is no guarantee of future results. All indexes are unmanaged and cannot be invested into directly.

The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security.

The economic forecasts set forth in the presentation may not develop as predicted.
Investing in stock includes numerous specific risks including: the fluctuation of dividend, loss of principal and potential illiquidity of the investment in a falling market.

Stock investing involves risk including loss of principal.

The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The VIX is a measure of the volatility implied in the prices of options contracts for the S&P 500. It is a market-based estimate of future volatility. When sentiment reaches one extreme or the other, the market typically reverses course. While this is not necessarily predictive, it does measure the current degree of fear present in the stock market.

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