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Kensho Stats

These stocks should lead a late-summer market breakout

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Despite a slow melt up into record territory this summer, the S&P 500 index has gone 25 sessions without a gain or loss of more than 1 percent. If history is any guide, the benchmark is about to break out of these summer doldrums with certain stocks leading the way.

Below are the best stock sectors to own when the market is moving out of a dull period, according to Kensho, a quantitative tool used by hedge funds.

Since 1985, the S&P traded sideways in a similar fashion as today 18 times. One month later, the index was reliably higher, up on average 1 percent.

Among specific sectors, utilities, industrials and energy led the way, posting positive returns greater than 1 percent, data from Kensho shows. Similarly, the odds of these sectors to close the summer in the black were greater than the rest of group, with positive trades recorded more than 80 percent of the time.


On the flip side, technology and material stocks underperformed, up less than 0.5 percent, according to Kensho.


Disclosure: NBCUniversal, parent of CNBC, is a minority investor in Kensho.