June Almanac, Vital Stats & Strategy Calendar: Political Uncertainty Wanes & Market Celebrates By: Jeffrey Hirsch & Christopher Mistal | May 26, 2016 | Email | Print

June has shone brighter on NASDAQ stocks over the last 45 years as a rule, ranking eighth with a 0.7% average gain, up 25 of 45 years. This contributes to NASDAQ’s “Best Eight Months” which ends in June. June ranks near the bottom on the Dow Jones Industrials just above September since 1950 with an average loss of 0.3%. S&P 500 performs poorly as well, ranking tenth, but essentially flat (–0.03% average). Small caps also tend to fare well in June. Russell 2000 has averaged 0.6% in the month since 1979.

 

In election years since 1950, June’s performance improves notably. June is the #4 DJIA month in election years averaging a 0.9% gain with a record of eleven advances in sixteen years. For S&P 500, June is #1 with an average gain of 1.4% (13-3 record). Election year June ranks #4 for NASDAQ and #5 for Russell 2000 with average gains of 1.9% and 1.6% respectively. This performance improvement is most likely the result of presidential candidate field being sufficiently narrowed and the ultimate Democratic and Republican nominees identified. 

 

 

The second Triple Witching Week of the year brings on some volatile trading with losses frequently exceeding gains. On Monday of Triple-Witching Week the Dow has been down eleven of the last nineteen years. Triple-Witching Friday is better, up nine of the last thirteen years, but weaker over the past 23 years, up thirteen, down ten with an average loss of 0.2%. Full-week performance is choppy as well, littered with greater than 1% moves in both directions. The weeks after Triple-Witching Day are horrendous. This week has experienced Dow losses in 23 of the last 26 years with average losses of 1.1%. NASDAQ and Russell 2000 have fared better during the week after, up five of the last seven.

 

June’s first trading day is the Dow’s best day of the month, up 21 of the last 28 years. Gains are sparse throughout the remainder of the month until the last three days when NASDAQ and Russell 2000 stocks begin to exhibit strength. The last day of the second quarter is a bit of a paradox as the Dow has been down 17 of the last 25 while NASDAQ and Russell 2000 have nearly the opposite record, although, since 2003 technology and small-caps indices have been dragged down by their large-cap brethren.