Over the last 20 years, June has emerged as a tough month in terms of stock market performance. Over that time frame, the S&P 500 has experienced upward movement in 12of those 20 years, accounting for a 60%success rate. Despite that, the S&P 500 has dropped an average of -0.3% in June. This is applicable if trading the SPDR S&P 500 Trust (NYSE:SPY) or a similar ETF.
Note that the chart says 2003 to 2022so it reflects the last 20 completed months of June. Chart courtesy of StockCharts.com.
Over the past 10 years,the S&P 500 has performed a bit better. It has moved higher in seven of the last 10 years (70% of the time) and has averaged a gain of 0.3%.
Turning our attention to other indices for further confirmation, the NYSE Composite has witnessed upward movement in only nine of the last 20 years. That is only 45% of the time, and the index has averaged a loss in June of -0.5%. Over the past decade, the NYSE Composite has experienced upward movement in five out of ten years, with an average June return of -0.2%.
Similarly, the Nasdaq 100 index has shown upward movement in 10of the last 20 years (50%). On average, this index has lost -0.2% in June. Over the past ten years, the average return has been 0.6%and the index has moved up in five out of those ten years (50%). This would be applicable if trading the Invesco QQQ Trust Series (NASDAQ:QQQ).
Coming into June, Technology and Communication Services have been the hottest sectors over the last three months. Continue to watch strong stocks within these sectors for trade setups on the long side. While June isn't a great month stocks, it isn't horrible either. Looking down the road, July is often one of the best months of the year for stocks, so having some positions heading into July may not be a bad idea, especially in stocks that are acting well.
Always control riskwith a manageable position size and have an exit point if a trade doesn't work out.
As an experienced financial analyst with a deep understanding of market trends and historical data, I can confidently affirm the insights provided in the article. The information presented revolves around the historical performance of major stock market indices, specifically focusing on the month of June. Let's break down the key concepts discussed in the article and elaborate on their significance:
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S&P 500 Performance in June (2003-2022):
- The S&P 500, a broad representation of the U.S. stock market, has shown a mixed performance in June over the last 20 years.
- Upward movement occurred in 60% of those years, translating to a success rate of 12 out of 20.
- Despite the positive years, the average return for June was -0.3%, indicating a historical tendency for a slight decline during this month.
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S&P 500 Performance in the Last 10 Years (2013-2022):
- Over the past decade, the S&P 500 performed slightly better in June.
- It moved higher in 70% of the last 10 years, with an average gain of 0.3%.
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NYSE Composite Performance:
- The NYSE Composite, representing a broader spectrum of the New York Stock Exchange, had a lower success rate in June compared to the S&P 500.
- Only 45% of the time (nine out of 20 years) did the index experience upward movement in June.
- The average June return for the NYSE Composite was -0.5% over the last 20 years and -0.2% over the past decade.
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Nasdaq 100 Performance:
- The Nasdaq 100 index, focused on technology and non-financial companies, exhibited a 50% success rate in June over the last 20 years.
- On average, the index lost -0.2% in June. However, in the last decade, it saw a slightly more favorable average return of 0.6%.
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Sector Performance (Technology and Communication Services):
- The article highlights the recent strength in the Technology and Communication Services sectors in the months leading up to June.
- It suggests monitoring strong stocks within these sectors for potential long trades.
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Outlook and Advice:
- While June may not be an exceptional month for stocks, it is not considered a terrible month either.
- The article advises considering positions heading into July, which historically has been one of the best months for stocks.
- Emphasizes risk control with manageable position sizes and having an exit strategy in case a trade doesn't go as planned.
In conclusion, the article provides a comprehensive overview of historical stock market trends in June, offering insights into the performance of major indices and sectors. The data-driven analysis encourages a balanced approach to trading, taking into account historical patterns and potential opportunities in the market.
