CHICAGO (Reuters) – With the warming of spring, there’s a natural tendency to think that stocks might warm up as well, despite less-than-sunny outlooks on interest rates from the Federal Reserve.
There is a documented weather pattern to Wall Street, which market watchers use as another indicator in their play books. But in this year of endless winter storms, the patterns have already been stood on their heads.
In positive years for stocks, January has typically seen rallies while February falters. Not so in 2014. The S&P 500 index dropped 3.5 percent in January, followed by a 4 percent rebound last month.
What’s going to happen next? Winter and early spring months have typically shown positive returns for Wall Street. Since 1950, in the period from November through April there have 48 years with gains and 14 with losses. For the other half of the year, stocks rose in 37 years and lost in 25, according to The Stock Trader’s Almanac, a publication that provides stock market analysis.
Late spring and summer traditionally are seen as periods of decline on Wall Street, something supported by research.