March Almanac: Above Average in Midterm Years By: Jeffrey A. Hirsch & Christopher Mistal | February 22, 2018 | Email | Print

 

March packs a rather busy docket. It is the end of the first quarter, which brings with it Triple Witching and an abundance of portfolio maneuvers from The Street. March Triple-Witching Weeks have been quite bullish in recent years. But the week after is the exact opposite, DJIA down 20 of the last 30 years—and frequently down sharply for an average drop of 0.54%. Notable gains during the week after for DJIA of 4.9% in 2000, 3.1% in 2007, 6.8% in 2009, and 3.1% in 2011 are the rare exceptions to this historically poor performing timeframe. 

 

Normally a solid performing market month, March improves modestly in midterm-election years (see Vital Statistics table below). In midterm years March ranks: 4th best for DJIA and S&P 500 and 3rd best for NASDAQ, Russell 1000 and Russell 2000. DJIA, S&P 500 and Russell 1000 have been up for five straight midterm Marchs.

 

 

Saint Patrick’s Day is March’s sole recurring cultural event. Gains the day before Saint Patrick’s Day have proved to be greater than the day itself and the day after. Perhaps it’s the anticipation of the patron saint’s holiday that boosts the market and the distraction from the parade down Fifth Avenue that causes equity markets to languish. Or maybe it’s the fact that Saint Pat’s usually falls in Triple-Witching Week. With the holiday falling on a Saturday this year (but also the day after Triple-Witching), the day before could be weaker than usual as some traders may look to stretch the holiday into a three-day weekend. 

 

Whatever the case, since 1950, the S&P 500 posts an average gain of 0.21% on Saint Patrick’s Day (or the next trading day when it falls on a weekend), a gain of 0.13% the day after, but the day before averages a 0.24% advance.

 

Good Friday and Easter have landed in the month 16 times in the last 68 years like they do this year. On the day before Good Friday S&P 500 has logged gains averaging 0.16% in the previous sixteen March Easters. Because the holidays are near month-end, the trading day after Easter has been weak.