NEW YORK: Equity bulls expecting a bumpy ride for US equities to be over soon have a historically favourable seasonal pattern on their side.
April tends to be a strong month for stocks, with the S&P 500 Index sporting an average gain of 1.5% since 1990, trailing only November’s 2.2% advance, data compiled by Bloomberg showed.
One popular theory pins the seasonal dynamic on retail investors – a persistent source of support for US stocks – returning to the market after the mid-month tax deadline.
“A lot of it revolves around the liquidity needs of retail heading into Tax Day,” said Dave Lutz, equity sales trader and macro strategist at Jonestrading Institutional Services LLC.
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