July is the best month for US and UK equity markets
July is the best month on the calendar for the S&P 500 over the past decade. It's returned an average of 2.79% in that time and has risen in four straight years and six of the past seven.
It's a similar story in the UK where it's also the best month for the FTSE 100. Globally, it's a good month for most indexes but not to the degree of the US and UK.
Technically, there is a great case for buying the S&P 500. The trade war just got sorted -- at least for the short term -- and the index hit an all-time high. The fear is that today's rally continues to fade (it's down to +12 from +35 earlier) and you have another false break.
If you're a bull, it looks like an inverted head-and-shoulders targeting 3600. The fundamental case is that the Fed keeps on cutting due to low inflation and continues to say trade 'uncertainty' is a problem. It's not my base case, but it's a reasonable path.
What makes stocks particularly interesting is that this truly is a 'hated' rally with fund managers all pulling money from the market and sentiment extremely negative. That's the kind of thing that often happens before a big rally that slowly drags everyone in on FOMO.
