Almost like clockwork every year in Los Angeles, for the entire month of June, we get pretty much nothing but grey skies. If we’re really lucky, the clouds break late in the afternoon to remind us all is not lost, usually in the form of one of our beautiful smog-enhanced sunsets.
Meanwhile, tourists spend their days aimlessly meandering the boardwalk of Venice, not sure what to do without the sun except buy t-shirts and watch Harry Perry roller skating in a turban hacking away on some LSD-induced Jimi Hendrix riff. Others are more hopeful, sitting on the beach slathered in zinc oxide, looking around, slowly realizing why their airfare was so cheap — hoping & praying their whole vacation won’t be ruined.
And here we are halfway into the year, all of the gains for the broad indices are gone. The sunny returns are evaporated, a distant memory scorched into the minds of investors. Meanwhile the bankers are running around on the beach with their bucket & shovels ready to build some more walls for the sand castles. But if history is any sort of teacher at all, June, at least seasonally-speaking for the markets is probably not going to be much different than our dreary LA skyline. The following chart shows the average month-to-date percentage change in the S&P 500 index by trading day during June from 1990 through 2011 from CXO Advisory:
And, until we know more about how many more shovels and buckets the bankers plan to marshal on our beaches — all we know is history, which is to say you might want to keep the chess board & extra books handy, because this could be another dreary June.