Market Musings 040323: A Return to Supportive Seaonality

Market Musings 040323:
A Return to Supportive Seaonality
SummarySeasonality is about to flip positive for key stock indicesBiased towards European stocksSectors: cyclical exposure has strongest seasonal effectMid and small caps also favouredCrude oil has a strong seasonal bias for next few monthsSuper Seasonality about to start
From the middle of March, seasonality turne positive from stock markets, led by the US.

Samp;P 500 index performs well traditionally from mid-March

Source: equityclock.com

From March 12, stocks typically go up in the US until mid-September, on average. While one can never completely rely on seasonal effects,these effects have been remarkably persistent over the long term.

The DAX index has typically gained nearly 7% from mid-March to the end of July over the last 20 years, while FTSE 100 seasonality has been positive until end-April (the classic Halloween effect).

DAX index: bullish seasonality continues until end-July

Favour Cyclical sectors: Oil amp; Gas, Materials, Industrials

The next few months favour cyclical sectors in terms of seasonal effects...