By the Numbers

Strong April = Strong Rest of Year?

With only a couple of days left in April, the markets have had a great month so far.  The major US indices are up 5% or more month-to-date.  Here are some stats for the month and what history has shown for the rest of year when April finishes strong.

April 2008 to date:

  • First time all major indices had monthly gains over 5% since April 2003
    • Dow - up ~5.4% MTD (best monthly gain since April 2007)
    • S&P 500 - up ~5.9% MTD (best monthly gain since April 2003)
    • Nasdaq - up ~6.6% MTD (best monthly gain since May 2005)
  • As of Friday, 11 up days vs. 8 down days for the Dow
    • Most up days since December 2007 (12 days)
    • Two up days away from July 2007 (13 days)
  • $114 billion in announced M&A transactions - highest avg deal size ($206 million) since May 2007

Historically, April has been one of the better months of the year.  On average the Dow, S&P and Nasdaq have been up 56%, 61% and 62% of the time respectively for the month of April.  Average returns for April rank 5th when compared to the other months of the year.  December is the best performing month and September is the worst.

So how do the markets perform for the rest of the year when you have a strong April?  In the history of the Dow, there have only been 17 Aprils with 5% gains or better.  When that happened, the Dow delivered a 9.6% average return and was up 76% of the time for the rest of the year.

Biggest S&P winners for the month so far:

  • Safeco - up 51% MTD
  • Ford - up 46% MTD
  • Broadcom - up 39% MTD
  • Micron Tech - up 31% MTD
  • Schering Plough - up 29% MTD