In a post last Friday, we noted that based on our Stock Seasonality tool, the S&P 500 was entering what has historically been its weakest seven-day stretch of the calendar year. That’s right, over the last ten years, the S&P 500 has been down in the one week period from the close on 5/10 through 5/17 by a median of 1.78% with declines eight out of ten times. The image below is from the post last Friday and shows how in the one-week period, our gauge of performance for the S&P 500 was all the way down to zero, meaning it doesn’t get any worse than that! When the market opened on Monday morning it was looking like another mid-May week from hell as the S&P 500 gapped down sharply on trade fears. In a pretty impressive turnaround, though, bulls clawed their way back and the S&P 500 was only down modestly on the week as of Friday afternoon.
So now that we have gotten through ‘hell week’ for the market, what can we expect next week? Below we show the updated gauges for the S&P 500’s historical performance over the next week, month, and three months (from the close on 5/17). While the week of 5/10 through 5/17 has typically been horrible, the week that follows has historically been slightly above average with the S&P 500 posting a median gain of 0.37%, which ranks in the 55th percentile of all 7-day periods throughout the year. Looking further out than a week, returns improve from there. The S&P 500’s median return one month after the close on 5/17 is a gain of 1.84% (71st percentile), and the median three-month return is a gain of 3.86%, which is better than 75% of all other one week periods throughout the calendar year. Now, if you want to find the stocks that have historically performed best during this period of the year, head on over to the Stock Seasonality tool for more info. If you are not currently a Bespoke Premium client, start a two-week free trial today for immediate access.