Third-Quarter and Second-Half Seasonality

schmd2000

Foreword: The first half of the year is now history. It was a disappointing six months for the S&P 500 Index (SPX), which was down 7.6%. Hopefully, things will turn around in the second half. This week I'll look at some past data to see what history has to tell us about the upcoming third quarter and the rest of the year.

Second Half of the Year: Below is a table showing S&P 500 data since 1975. It's a summary of how the market has performed for the second half of the year, depending on whether the first half was positive or negative. The average return from July through December is 3.24%, with positive returns 66% of the time. However, in those cases when the market lost value in the first half, the data is pretty dispiriting. In such cases, the rest of the year averaged a substantial loss of 1.42% and saw positive returns less than half the time.


The Third Quarter: If the table above wasn't disheartening enough, check out the S&P 500 performance by quarter since 1975. The third quarter is the only quarter that has averaged a negative return, while the other quarters all give pretty pleasing results.


Finally, I broke down the third quarter depending on whether the first half of the year was positive or negative. Remember, the S&P 500 was down 7.6% in the first half of this year. A negative first half has typically been followed by continued losses in the third quarter. Since 1975, the third quarter has been down by an average of 2.74% when the first half of the year is negative.

jeff110

Thanks for sharing!

sooners

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everest001

Thanks!