Join us for our quarterly Investment Roundtable webinar, featuring SEIA’s Chief Investment Officer, Deron McCoy, and a special guest speaker. In addition to a timely topic from our guest speaker, Deron will review the economic and investment landscape, including the prospects for a soft landing.
Historically, when summer gives way to fall, it’s merely early spring for US equity markets.
Seasons aren’t just for the weather. By tracking how the S&P 500 has historically progressed through the year, we can see some seasonality. The chart below shows the average path of the S&P 500 from 1969 through 2022. The market tends to rise early in the year, then trends sideways over the summer, before pushing higher into year-end.
Keep in mind, in any given year there are countless variables, both good and bad, impacting stock prices. This year has been no exception. We’ve seen the fastest rate hiking cycle since the 1970’s, stubbornly high inflation, bank failures, partisan brinksmanship, threats of government shutdowns, and now escalating tensions in the Middle East.
Even with all the seemingly rare events that have occurred this year, the market has followed this seasonal pattern rather closely. Below we added the path the S&P has taken thus far in 2023. The recent pullback we’ve seen has coincided with the typical summer lull, but we’re now reaching the part of the year (mid-October) when the market tends to drift higher.
The current economic backdrop is extremely dynamic and requires far more analysis than simply understanding seasonal patterns. Still, it is good to know that for the first time in several months, the seasonal winds are at investors’ backs.
While the current economic situation is complex and multifaceted, understanding these seasonal patterns can be a valuable tool for investors. Contact your SEIA Advisor to learn how your portfolio is set up to take advantage of these seasonal winds.
MARKET BACKDROP
ASSET CLASS SUMMARY As of 10/27/2023
Asset Class
1 Month
3 Month
YTD
1 Year
3 Year
5 Year
10 Year
U.S. Stock
-4.04%
-9.53%
+7.42%
+8.21%
+7.21%
+10.27%
+10.28%
Global Ex U.S.
-3.43%
-10.72%
+1.47%
+11.74%
+2.34%
+4.36%
+3.01%
U.S. Bond
-1.07%
-3.95%
-2.48%
+0.00%
-5.59%
-0.09%
+0.91%
Global Bond
-0.60%
-5.04%
-3.11%
+0.89%
-7.48%
-1.71%
-0.68%
U.S. Real Estate
-4.57%
-14.99%
-10.39%
-7.32%
+0.57%
+2.22%
+4.69%
Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Market segment (index representation) as follows: U.S. Stock (Russell 3000 Total Return), Global Stock Ex U.S. (MSCI ACWI Ex USA Net Total Return), U.S. Bond (Bloomberg US Aggregate), Global Bond (Bloomberg Global Aggregate), U.S. Real Estate (Dow Jones US Real Estate Index Total Return)
SECTOR SUMMARY As of 10/27/2023
Cyclical
1 Month
3 Month
YTD
1 Year
3 Year
5 Year
10 Year
Consumer Cyclical
-4.93%
-10.86%
+18.64%
+5.26%
-0.71%
+8.64%
+10.32%
Financials
-5.33%
-10.03%
-6.73%
-3.71%
+11.32%
+6.77%
+8.60%
Materials
-3.71%
-11.02%
-2.07%
+3.50%
+7.73%
+10.49%
+7.63%
Real Estate1
-3.75%
-14.17%
-10.21%
-6.66%
+1.10%
+4.04%
+5.76%
Sensitive
1 Month
3 Month
YTD
1 Year
3 Year
5 Year
10 Year
Comm. Services
-3.58%
-5.36%
+34.84%
+34.45%
+2.84%
+8.92%
+6.10%
Energy
-8.37%
-0.23%
-0.91%
-1.32%
+49.89%
+10.31%
+3.93%
Industrials
-4.95%
-11.54%
-0.54%
+6.20%
+9.41%
+8.94%
+8.94%
Technology
-0.69%
-8.26%
+32.35%
+32.60%
+12.74%
+20.36%
+19.66%
Defensive
1 Month
3 Month
YTD
1 Year
3 Year
5 Year
10 Year
Consumer Defensive
-3.06%
-10.30%
-7.70%
-3.07%
+4.81%
+7.80%
+7.93%
Health Care
-4.61%
-8.28%
-8.26%
-4.16%
+6.90%
+9.07%
+10.77%
Utilities
-2.25%
-11.87%
-14.68%
-7.41%
-0.08%
+5.29%
+7.76%
Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Market segment (index representation) as follows: Consumer Cyclical (S&P 500 Consumer Discretionary (Sector) Total Return), Financials (S&P 500 Financials (Sector) Total Return), Materials (S&P 500 Materials (Sector) Total Return), Real Estate (S&P 500 Real Estate (Sector) Total Return1), Comm. Services (S&P 500 Communication Services (Sector) Total Return), Energy (S&P 500 Energy (Sector) Total Return), Industrials (S&P 500 Industrials (Sector) Total Return), Technology (S&P 500 Information Technology (Sector) Total Return), Consumer Defensive (S&P 500 Consumer Staples (Sector) Total Return), Health Care (S&P 500 Health Care (Sector) Total Return), Utilities (S&P 500 Utilities (Sector) Total Return).
1) The index Launch Date is Sep 19, 2016. All information for an index prior to its Launch Date is hypothetical back-tested, not actual performance, based on the index methodology in effect on the Launch Date. Back-tested performance reflects application of an index methodology and selection of index constituents with the benefit of hindsight and knowledge of factors that may have positively affected its performance, cannot account for all financial risk that may affect results and may be considered to reflect survivor/look ahead bias. Actual returns may differ significantly from, and be lower than, back-tested returns. Past performance is not an indication or guarantee of future results. This back-tested data may have been created using a “Backward Data Assumption”. For more information on “Backward Data Assumption” and back-testing in general, please see the Performance Disclosure.
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Dated Material
Dated material presented here is available for historical and archival purposes only and does not represent the current market environment. Dated material should not be used to make investment decisions or be construed directly or indirectly, as an offer to buy or sell any securities mentioned. Past performance cannot guarantee future results.
