|The Summer (Tail)winds
June is historically a tough month for stocks – in fact, it’s been the second worst performing month of the year. Since 1990, the S&P has logged an average loss of 0.52 percent in the month of June. You may not realize it after this week’s selloff, but the S&P is still up about 2 percent this month – and if these gains can hold, it could mean good news for the rest the year. Since 1990, there have been only six other times when the S&P gained at least 2 percent or more in the month of June. After a similar move, the momentum tends to follow through to the following month, with the S&P averaging a return of about 1 percent in July – and over the rest of the year, the index tacks on another 5 percent, a positive trade 83 percent of the time.
Digging into sector performance in those six instances, a few standouts emerge. The Financials sector logs an average gain of about 9 percent, trading positively 67 percent of the time. Healthcare and Industrials also outperform, gaining 8.5 percent and 7.9 percent respectively – with Healthcare the most consistent winner, trading positively 83 percent of the time.