June Almanac & Vital Stats: Better in Pre-Election Years
By: Jeffrey A. Hirsch & Christopher Mistal
May 18, 2023
Over the last 52 years June has shone brighter on NASDAQ stocks as a rule ranking eighth best with an 0.8% average gain, up 29 of 52 years (since 1971). 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 0.2%. S&P 500 performs similarly poorly, ranking ninth, but essentially flat (0.02% average gain). Small caps have also tended to fare well in June. Russell 2000 has averaged 0.6% in the month since 1979 advancing 63.6% of the time. During last year’s bear market, Russell 1000 and 2000 suffered their worst June losses ever, dropping 8.5% and 8.4% respectively. S&P 500 and NASDAQ also dropped over 8% last year.
[Recent 21-Year June Seasonal Chart]
Over the last twenty-one years, the month of June has been a rather lackluster month for the market. DJIA, S&P 500 and Russell 1000 have all recorded average losses in the month. Russell 2000 has fared better with a modest average gain. Historically the month has opened respectably, advancing on the first and second trading days. From there the market then drifted sideways and lower into negative territory just ahead of mid-month. Here the market rallied to create a nice mid-month bulge that quickly evaporated and returned to losses. The brisk, post, mid-month drop is typically followed by a month end rally led by technology and small caps. 
Historical performance in pre-election years has been much stronger with all five indexes finishing with average gains. June’s overall pattern in pre-election is similar to the last 21-years pattern with a brief, shallow pullback after a solid start. In pre-election years the mid-month rally has been much more robust beginning around the sixth trading day and lasting until the fifteenth. Followed by another modest retreat and rally into the end of Q2.
[Pre-Election Year June Performance Table]
Despite being much stronger in pre-election years, June still ranks mid-pack. For S&P 500 pre-election year June ranks fifth best. For the rest it is just sixth best. Average monthly gains in pre-election year June range from 1.1% by DJIA to a respectable 2.4% from NASDAQ. Russell 2000 has been the most consistently bullish in pre-election years, up 8 of the last 11 (72.7% of the time).
The second Triple Witching Week of the year brings on some volatile trading with losses frequently exceeding gains. On Monday of Triple-Witching Week DJIA has been down fifteen of the last twenty-six years. Triple-Witching Friday is somewhat better, DJIA has been up seventeen of the last thirty-years years, but down seven of the last eight. Full-week performance is choppy as well, littered with greater than 1% moves in both directions. The week after Triple-Witching Day is horrendous. This week has experienced DJIA losses in 27 of the last 33 years with average losses of 0.8%. NASDAQ and Russell 2000 had fared better during the week after, but that trend appears to be fading.
[June Vital Stats Table]
June’s first trading day is the Dow’s best day of the month, up 27 of the last 35 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 was a bit of a paradox as the Dow was down 17 of the last 31 from 1991 through 2014 while NASDAQ and Russell 2000 had nearly the opposite record. Since 2015, all indexes have had a bullish bias on the last trading day, with DJIA and S&P 500 up seven of the last nine.
This will be just the second year the market will be closed in observance of Juneteenth National Independence Day on June 19. Data remains limited and any impact remains to be observed. However, the holiday’s proximity to quarterly options expiration and Father’s Day, could lead to some additional volatility ahead of the long weekend.