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Wall Street History
https://www.gofundme.com/s3h2w8
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05/30/2003
''Cause It's Summer
[Next piece, June 13]
Until the experts looked behind the numbers, for years market
lore had you believe that the fabled “summer rally” was the best
time of year for Wall Street.
Alas, the facts prove otherwise, and the summer rally, defined as
the May / June low to the 3rd quarter high, has the smallest gain
of any seasonal rally, +9.4% (as represented by the Dow Jones
Industrial Average) since 1964. [With the trend in equities ‘up’
over the long haul, all four seasons are positive.]
The best period is the “winter rally”; the November / December
low to the first quarter high, +13.7% over the same period.
[Source: 2003 Stock Trader’s Almanac]
But some of you may find the following helpful, my own way of
playing with the numbers. I look at the period between the close
for the S&P 500 the Friday before Memorial Day and the Friday
before Labor Day. Toss in the total return on the S&P for the
year, along with both the price / earnings ratio and the investor
sentiment readings for the week before Memorial Day and voila!
Of course the period 1997-2002 includes the good and the bad,
yet with the exception of the summer of 2000, the season has
badly underperformed the year as a whole. You’re also
reminded how we’ve become used to such high valuations and
bullish sentiment, the latter at least among the investment
advisors.
1997: S&P 500 +33.4% (total return for the year)
5/23 847.03 (S&P 500) 8/29 899.47 +6.2%
p/e 21.2 bull / bear: 44.9 / 30.5
1998: S&P 500 +28.6%
5/22 1110.47 9/4 973.89 -12.3%
p/e 28.1 bull / bear: 47.5 / 25.0
1999: S&P 500 +21.0%
5/28 1301.84 9/3 1357.24 +4.3%
p/e 33.9 bull / bear: 60.7 / 28.6
2000: S&P 500 -9.1%
5/26 1378.02 9/1 1520.77 +10.4%
p/e 27.0 bull / bear: 46.0 / 32.4
2001: S&P 500 -11.9%
5/25 1277.89 8/31 1133.58 -11.3%
p/e 25.6 bull / bear: 47.9 / 35.4
2002: S&P 500 -22.1%
5/24 1083.82 8/30 916.07 -15.5%
p/e 43.9 bull / bear: 53.1 / 30.6
2003
5/23 933.22 8/29 ?
p/e 33.8 bull / bear: 56.0 / 20.9
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Note:
Both Nasdaq and the S&P 500 have fallen each of the last five
Julys. [The Dow declined 3 of 5.]
*Wall Street History will return June 13.
Brian Trumbore
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