[Editor’s note: You are receiving the August Almanac email Issue early in order to move the August Outlook Issue to next Thursday and then have the members’ only webinar on Wednesday, July 30. A registration link for the webinar will be included in next week’s issue, after the market’s close on July 24.]
Agriculture and farming made August a great stock market month in the first half of the Twentieth Century. It was the best DJIA month from 1901 to 1951. (See page 42 of the 2025 Almanac comparing the seasonal patterns of DJIA before and after 1950.) Now it is the worst DJIA and Russell 2000 and second worst S&P 500, NASDAQ, and Russell 1000 month over the last 37 years, 1988-2024 with average performance ranging from +0.1% by NASDAQ to a –0.8% loss by DJIA. In 2022, DJIA, S&P 500, NASDAQ, and Russell 1000 all declined over 4% in August and in 2023 they declined 1.8% or more.
Contributing to this poor performance since 1988; the second shortest bear market in history (45 days) caused by turmoil in Russia, the Asian currency crisis and the Long-Term Capital Management hedge fund debacle ending August 31, 1998, with the DJIA shedding 6.4% that day. DJIA dropped 1344.22 points for the month, off 15.1%—which is the second worst monthly percentage DJIA loss since 1950. Saddam Hussein triggered a 10.0% slide in August 1990. The best DJIA gains occurred in 1982 (11.5%) and 1984 (9.8%) as bear markets ended. Sizeable losses in 2010, 2011, 2013, 2015 and 2022 of over 4% by DJIA have widened its August average decline.
![[Post-Election Year August Table]](/UploadedImage/AIN_0825_20250717_PE_August_Mini_table_ranks.jpg)
In post-election years, Augusts’ rankings are little changed, but performance has been negative across the board. August is the worst month in post-election years for DJIA and Russell 1000 and second worst for S&P 500, NASDAQ and Russell 2000. Average declines in post-election year Augusts range from –0.5% by Russell 2000 to –1.5% by DJIA. Each index has also seen more declining post-election year Augusts than positive.
Historically, the first eight or nine trading days of the month have exhibited weakness while mid- and late month has been somewhat better. In post-election years, August has opened with strength, accumulating gains on average over the first and second trading days before reversing and sinking until shortly after mid-month. At which point, a bounce of varying magnitude and duration occurred before the major indexes slipped into a choppy/sideways trading path to close out the month
On Monday of monthly options expiration DJIA has been up 19 of the last 30 years with four days up more than 1%. Monthly expiration Friday has improved recently, up 14 of the last 22 years and up 6 of the last 7. In monthly expiration week, DJIA is down 21 times in 35 years since 1990, with some sizable losses; –2.6% in 1990, –2.3% in 1992, –4.2% in 1997, –4.0% in 2011, –2.2% in 2013, –5.8% in 2015, and –2.2% in 2023. The week after expiration has been stronger, DJIA up 21 of the last 34.