For the S&P 500 SPX, -0.31%<\/span><\/a><\/span> June ranks as the third-worst performing month of the year. The benchmark index\u2019s performance is essentially flat over the month, with an average decline of 0.03%, according to the Almanac. Of the past 67 Junes, 35 have been positive, while 32 have been negative.<\/p>\n Historical statistics paint a more positive picture for the Nasdaq Composite Index COMP, +0.12%<\/span><\/a><\/span> which is currently the best-performing of the three major indexes in 2018. It\u2019s seen an average rise of 0.7% over the month, and over the past 46 years, 25 Junes have been positive while 21 have been down.<\/p>\n Despite the gain on the month, June\u2019s performance only ranks as the eighth-best for the Nasdaq.<\/p>\n Were the indexes to post their average June performance over the coming months, trading would look fairly similar to the recent, rangebound activity<\/a>. If the Dow is the worst performer over June, that would match it\u2019s year-to-date trend. It is up 0.4% thus far in 2018, the weakest performer of the three major indexes. Similarly, a bigger gain for the Nasdaq would extend the index\u2019s year-to-date outperformance; it is up 7.6% in 2018 while the S&P is up 2%.<\/p>\n Weak performance in summer months is part of a historical trend embodied by the phrase \u201csell in May and go away.\u201d What this means is that the stretch between the start of May and the end of October has been a seasonally weak period for markets. While this has been true over the long term, as seen in the following table that looks at S&P 500 performance, the trend hasn\u2019t held over the past five years, according to the WSJ Market Data Group.<\/p>\n As May\u2019s performance bucked this trend \u2014 although there are four trading days until the end of the month \u2014 there\u2019s room for optimism that the \u201csell in May\u201d strategy may not work again this year.<\/p>\n \u201cTypically that trend results from a pattern of stocks going up through April, and then cooling off in the summer. This year, stocks went sideways until April. We think the market is building a base to move higher and catch up with earnings,\u201d said John Augustine, chief investment officer of Huntington Private Bank. \u201cWe expect momentum to turn higher.\u201d<\/p>\n An additional element of uncertainty, however, could come from the runup to the November midterm elections. Per the Almanac, the Dow has seen an average fall of 1.7% in June during midterm years, while the S&P has seen an average fall of 1.9% and the Nasdaq loses 1.6%. For both the Dow and the S&P, June has historically been the worst month in midterm years, while it\u2019s been the third worst month for the Nasdaq.<\/p>\n Declines matching the average would hardly be catastrophic or even out of the ordinary for Wall Street, but it would extend the lengthiest stretch in correction territory<\/a> that the Dow and the S&P 500 have seen in a decade. Furthermore, ongoing sideways trading could threaten the ominous chart pattern of a \u201cdeath cross\u201d<\/a> for the S&P 500. This is where a security\u2019s 200-day moving average crosses over its 50-day.<\/p>\n The coming midterm elections, particularly as campaigning begins to ramp up for the November vote, is widely seen as a potential political risk for markets. Goldman Sachs recently wrote that they were \u201cone reason to expect that current elevated levels of uncertainty will persist in coming months.\u201d<\/p>\n So far in May, the Dow is up 2.7%, the S&P is up 3%, and the Nasdaq has gained 5.1%. That\u2019s sharply better than historical performance. Per the Almanac, the Dow has seen a 0.02% average decline in May, while the S&P has seen an average rise of 0.2%, with the Nasdaq rising an average 0.9%.<\/p>\n The month\u2019s performance was even stronger when you consider it against past midterm years. Historically, the Dow falls an average 0.7% in such years while the S&P declines 0.9% and the Nasdaq falls 1.2%.<\/p>\n![](\"https:\/\/ei.marketwatch.com\/Multimedia\/2018\/05\/25\/Photos\/NS\/MW-GI151_image_20180525090002_NS.jpg?uuid=89e07114-601b-11e8-a40a-ac162d7bc1f7\")
courtesy WSJ Market Data Group<\/cite><\/div>
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