Morgan Stanley expect a sharp contraction in corporate earnings to weigh on US equities this year and they see the S&P500 lower at 3,900 by year end.
However, Goldman Sachs are expecting mild growth from the S&P500 this year. So, with the path of inflation unknown, analysts divided on whether the Fed will hike in June, skip a meeting, or pause rates, & global growth also in the balance the path for US stocks in June is far from clear.
So, let’s see what the S&P500 is like from a seasonal perspective.
Over the last 15 years the S&P500 has lost value 60% of the time between June 01 and June 30. The S&P500 paid has seen an average fall of -0.43% with the largest fall of -7.70% last year.
So, with a weak seasonal period ahead traders should note that a sudden bearish policy shift from the Fed on June 14 could see stocks fall lower in line with their weaker summer seasonal pattern.
Major Trade Risks:
The major near term trade risk here is if inflation cools suddenly and the Fed announce a rate pause when they meet on June 14.
Remember, don’t just trade it, Seasonax it!