Insights + Resources

Sneak Peek into Second Half Seasonality of Stocks

Jul 1, 2024

Key Takeaways

  • Stocks are heading into the second half with impressive momentum. Historically, a strong first half tends to be followed by above-average second-half returns.
  • Perhaps unsurprisingly, 1995 had the highest correlation to 2024 (based on first-half progressions) — a year that included a soft landing, the launch of the internet, and extremely low volatility.
  • Despite the bullish precedence from a positive first half, bull markets are not linear. The maximum drawdown for the S&P 500 during the second half has averaged -10.3% since 1950. However, seasonality data suggests dips should be bought in the second half.
  • Technically, the S&P 500 remains in a bull market and above its long-term uptrend, but overbought conditions — especially in technology and semiconductors — and notable divergences in market breadth point to a potential short-term pause or pullback in this rally.

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