Daily Spotlight

June Jinx?

June is not one of the better months for stocks, according to our analysis of market returns since 1980. On average, equity investors in June barely eke out a 0.2% positive return for the month -- better than only the weakest months of August and September. The winning percentage is 60%, again higher than only the 3Q months. We note market returns in June have exceeded 5% only twice in the past 37 years: a 5.4% increase in 1999 and last year's 6.9% gain. Clunkers include 2008 (-8.6%), 2002 (-7.2%), 2010 (-6.1%) and 1991 (-4.8%). June is typically a quiet month, as the second quarter draws to a close. Few companies report earnings. The Fed also meets; while it won't be lowering rates this time, we expect to hear Chairman Powell ask for more fiscal stimulus help from the U.S. government, as unemployment continues to rise. After an awful first quarter, the S&P 500 is now down only 6% for the year. April and May were both good months, as investors are assuming the worst economic pain already has been endured. But that doesn't mean there won't be pain ahead - as well as high volatility. We continue to recommend that investors focus on financially strong companies with experienced management teams. The gilt-edged balance sheets should carry a company through the pandemic, and top-performing management should lead it to the other side. ...  2010 (-6.1%) and 1991 (-4.8%). June is typically a quiet month, as the second quarter draws to a close. Few companies report earnings. The Fed also meets; while it won't be lowering rates this time, we expect to hear Chairman Powell ask for more fiscal stimulus help from the U.S. government, as unemployment continues to rise. After an awful first quarter, the S&P 500 is now down only 6% for the year. April and May were both good months, as investors are assuming the worst economic pain already has been endured. But that doesn't mean there won't be pain ahead - as well as high volatility. We continue to recommend that investors focus on financially strong companies with experienced management teams. The gilt-edged balance sheets should carry a company through the pandemic, and top-performing management should lead it to the other side.   more

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