How Will the Stock Market React to June’s Decline?

July 11, 2013 | ,

After 7 months of consecutive gains, the S&P 500 Index (“SPX”) dropped by 1.3% in June. While a down month in the market was inevitable, one of the primary worries for investors as we enter the second half of the year is how the stock market will react to June’s losses. In an effort to answer this question, this week’s chart examines market reactions after previous “winning streaks” were broken. For purposes of the analysis, we define “winning streaks” as positive streaks of six months or more for the SPX. From 1954 to 2012 there have been 18 such winning streaks that were broken. Because we are focused on the second half of 2013, we chart the subsequent 6 month returns of the SPX.

Of the 18 data points in the analysis, there were 16 winners (89%) with a median percentage change of 8.87%. In other words, almost 9 out of 10 times, the end of a winning streak has been followed by positive returns in the U.S. stock market. Although historical data may not be indicative of future performance, investors might take comfort from the S&P 500’s past responses to snapped win streaks.

Related Content

09.27.2023

The Implications of a Government Shutdown

The federal government will shut down if Congress is unable to pass funding legislation by October 1, and a bill…

09.22.2023

2023 Investment Symposium

Watch the flash talks from Marquette’s 2023 Investment Symposium livestream on September 15 in the player below — use the upper-right…

09.21.2023

The State of the IPO Market

After a red hot 2021, the initial public offering (IPO) market has materially slowed over the last two years amid…

This chart description is for illustrative purposes only and its accuracy cannot be guaranteed. Please see full disclosures at end of PDF document in the web post. General description: Combination 3-line and area chart showing interest payments as a percentage of household income and new delinquency rates for various forms of U.S. consumer debt. Chart subtitle: Interest payments as a percentage of household income have increased to a 15-year high while delinquencies have risen to pre-pandemic levels. Chart source: Bureau of Economic Analysis, Federal Reserve Bank of New York Center for Microeconomic Data as of June 30, 2023. Chart visual description: Data is quarterly; displayed in 9-month increments on x-axis from Mar-03 to Jun-23. Left Y-axis is labeled “Percentage of Household Income” and ranges from 0% to 5%. Right Y-axis is labeled “New 30+ Day Delinquency” and ranges from 0% to 16%. Interest Payments (Excl. Mortgages) corresponds to left Y-axis and is plotted in solid dark gray area. Lines plot three other data series corresponding to right Y-axis: teal for Auto Loans, light teal for Credit Cards, and dark teal for Student Loans. Chart data description: Interest Payments have increased sharply since September 2021 following rate hikes by the Federal Reserve. Auto Loans and Credit Cards lines have generally followed same slope since. Student Loans sharply decreased following payment pauses, and have remained near flat. Latest data points as of June 2023: Interest Payments at 4%. Auto Loans at 7%. Credit Cards at 7%. Student Loans at 1%. Please contact us for the full dataset. End chart description. See disclosures at end of document.

09.12.2023

Feeling the Squeeze

As investors and economists meticulously analyze data to predict future actions of the Federal Reserve, the domestic economy has maintained…

This chart description is for illustrative purposes only and its accuracy cannot be guaranteed. Please see full disclosures at end of PDF document in the web post. General description: Combination line and area chart showing cumulative return of the S&P 500 Semiconductors & Equipment Index and value of private construction put in place by sector. Chart subtitle: The CHIPS and Science Act has helped provide a tailwind for semiconductor companies over the last year. Chart source: Bloomberg and U.S. Census Bureau as of July 31, 2023. Chart visual description: Data is monthly; displayed in 6-month increments on x-axis from Aug-13 to present. Left Y-axis is labeled “Value of Private Construction Put in Place” and ranges from $0B to $210B (labeled through $200B). Right Y-axis is labeled “Cumulative Return” and ranges from 0% to 1000%. Sectors corresponding to left axis are as follows: Computer/Electronic/Electrical uppermost of area stack in green; Chemical in blue; Food/Beverage/Tobacco in purple; Transportation Equipment in teal; Plastic/Rubber in dark blue; Nonmetallic Mineral in orange; Fabricated Metal in dark green; Other in gray. Line corresponding to S&P 500 Semiconductors & Equipment Index is slate, corresponding to right Y-axis. Chart data description: Please contact us for the full dataset. Latest data as of July 2023: S&P 500 Semiconductors & Equipment Index at 907% cumulative return; CEE at $110.9B; Chemical at $37.8B; Food/Bev/Tobacco at $15.9B; Transp Equipment at $9.1B; Plastic/Rubber at $2.2B; Nonmetallic Mineral at $1.9B; Fabricated Metal at 1$.4B; Other at $21.5B. End chart description. See disclosures at end of document.

09.06.2023

CHIPS Ahoy!

The U.S. Department of Commerce recently celebrated the one-year anniversary of the CHIPS and Science Act, which was signed into…

This chart description is for illustrative purposes only and its accuracy cannot be guaranteed. Please see full disclosures at end of PDF document in the web post. General description: Two-line chart showing prices for live cattle futures and corn futures. Chart subtitle: Higher beef prices could lead to more expensive cookouts this Labor Day weekend. Chart source: Bloomberg as of August 29, 2023. Chart visual description: Data is monthly. Left Y-axis is labeled “$/Pound” corresponding to Live Cattle Futures slate line and ranges from $0 to $2. X-axis ranges from June 1992 to August 2023. Right Y-axis is labeled “$/Bushel” corresponding to Corn Futures light green line and ranges from $0 to $9. Chart data description: Please contact us for the full dataset. Latest data as of August 29: Live cattle $1.81/lb; Corn $4.69/lb. End chart description. See disclosures at end of document.

08.30.2023

Where’s the (Affordable) Beef?

Readers who have recently shopped for Labor Day barbeque supplies may lament the fact that beef prices have climbed to…

More articles

Subscribe to Research Email Alerts

Research Email Alert Subscription

Research alerts keep you updated on our latest research publications. Simply enter your contact information, choose the research alerts you would like to receive and click Subscribe. Alerts will be sent as research is published.

We respect your privacy. We will never share or sell your information.

Thank You

We appreciate your interest in Marquette Associates.

If you have questions or need further information, please contact us directly and we will respond to your inquiry within 24 hours.

Contact Us >