Broker Check

April’s Bullish History

| April 02, 2019
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Seasonality could be on the bull’s side, especially after U.S. stocks’ best first quarter in 20 years.

As shown in the LPL Chart of the Day, April has consistently been one of the strongest months for U.S. stocks. Over the past 20 years, April has actually been the best month of the year for the S&P 500 Index, rising 1.7% on average.

U.S. stocks’ strength in April has been especially apparent in the current bull market. The Dow Jones Industrial Average (Dow) has closed up in April for the last 13 years, while the S&P 500 has closed up in April for 12 out of the past 13 years. Positive momentum at the start of the year has helped April’s returns: Since 1950, April has closed up 15 of 19 years when January, February, and March were all positive as well, and the average gain in April for those 15 years was 2.6%.

It’s hard to say what has caused positive seasonality at this point in the year. Investors could be heaving a sigh of relief after a typically volatile first quarter, managers could be squaring up portfolios at the start of a new quarter, or the advent of spring and warmer weather could just lighten up everybody’s moods.

However, higher stock prices may be tougher to achieve this April. U.S. stocks just capped a strong rally after a near bear market to end 2018, and a weaker corporate outlook, recession worries, and global headwinds could inhibit markets in the short term.

“April may bring showers, but lately it has brought a lot of green as well,” explained LPL Senior Market Strategist Ryan Detrick. “With the Dow up 13 of the past 13 years in April, this month sure has been kind to the bulls, but 2019 is a new year, and there are always new worries.”

We believe the S&P 500 will eventually push higher through 2019, as we maintain our 3,000 fair value target.

IMPORTANT DISCLOSURES

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. The economic forecasts set forth in this material may not develop as predicted.

All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. All performance referenced is historical and is no guarantee of future results.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

This research material has been prepared by LPL Financial LLC.

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