Detrick: July is the best month for stocks in a post-election year

Key Concepts:

• S&P 500 historical performance in July
• Cyclical vs. Defensive sectors
• Momentum stocks and ETFs
• Market sentiment and optimism

S&P 500 and July Performance

• July has historically been a strong month for the S&P 500.
• Over the past ten years, the S&P 500 has averaged a 3.33% increase in July.
• July is historically the best-performing month for the S&P 500 in a post-election year.
• The S&P 500 has been higher in the final six months of the year 15 out of the last 16 times when May and June are strong.

Sector Performance and Market Leadership

• Cyclical sectors (financials, industrials, technology) are preferred as market leaders.
• The lagging of defensive sectors is seen as a positive sign for a healthy bull market.
• These cyclical areas are expected to continue leading the market in a "surprise summer rally."

Investment Opportunities: Momentum Stocks

• Momentum stocks and ETFs are recommended as potential opportunities to capitalize on the July rally.
• Momentum is up 14% for the year.
• The continued outperformance of momentum stocks is anticipated.

Market Sentiment and Optimism

• A lack of widespread optimism is viewed as a positive sign for the market.
• The fact that many people are still worried is considered a good thing.

Conclusion:

The historical data suggests that July is a favorable month for the S&P 500. The strategist recommends focusing on cyclical sectors and momentum stocks to potentially benefit from a continued market rally. The lack of widespread optimism in the market is seen as a positive indicator, suggesting that the bull market may have further room to run.