Four Months in a Row
A Rare Occurrence
Following the two down months of February and March, the S&P has strung together four consecutive monthly gains, if we include July. This actually marks the third year in a row when the April – July period marked gains for each month consecutively.
Historically, this has been a rare occurrence. In fact, the familiar saying of “sell in May and go away” has merit, since very often, weakness crops up in the markets during these months, even during strong years. Historically, these months have weaker returns.
Looking back, there have only been 11 years since 1928 where stocks gained in each of these months. What does that portend for the rest of the year? While August has proved shaky in those years, the remainder of the year finished exceptionally strong. The average return during the final five months of the year was 10.8%. This compares to gains only 70% of the time for all other years. Maybe, this indicator spells good things for the markets.
(data furnished by Bespoke Investments)
As a follow-up to my Investment Overview on the symbiotic relationship between the government and the stock market, the link below describes how the current trade tensions might be resolved.
Generally, the market has shrugged off the obvious ill effects of the tariffs. The reason is that the stock market knows that ultimately, the government cannot afford a policy that would be detrimental to stock prices.
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