New York, USA – Investors continue to ride the wave of optimism on Wall Street as the stock market delivers impressive returns in the first half of 2024. The S&P 500 saw a gain of 14.5%, with the Nasdaq Composite outperforming with an 18% increase. The trend of positive performances in July dates back several years, with the Nasdaq closing in the green for 10 out of the past 11 Julys.

Historical data shows that strong starts to the year often lead to positive outcomes by year-end. Looking back to 1928, years where the S&P 500 was up 10% or more at the halfway mark resulted in an average gain of 24% by the end of the year. This trend of second-half positivity is consistent, with the second half of the year closing positive in the 12 instances of strong starts to the year since 1988.

However, the market is not without its challenges. The memory of the two October stock market crashes in 1929 and 1987 serves as a reminder of the potential for significant downturns despite overall bullish sentiments. While July typically sees an average return of 1.4%, the percentage of positive returns drops slightly compared to the previous month.

As the year progresses, market patterns fluctuate, with August showing lackluster performance and September and October experiencing negative average returns. However, there is hope for a turnaround as bullish trends tend to reemerge from November onwards, coinciding with the traditional Santa Claus rally towards the end of the year.

While historical seasonality patterns can offer insights into market trends, unexpected events can quickly shift the trajectory. Despite this, stock seasonality studies have proven to be reliable during this bull market. The trend of positive returns in early July is one to watch, with potential for continued strength before traditional election market patterns come into play.

Analysts at BofA have studied the market’s performance in the first and last 10 trading days of each month since 1928, noting the beginning of July as a particularly strong period. This data, combined with historical patterns, provides investors with valuable information to navigate the ever-changing landscape of the stock market.