Kensho Stats

Record-breaking rally should continue through March with cyclical stocks leading the way, history shows

Oil workers on a rig platform in Colorado.
Stephen Collector | Getty Images
Oil workers on a rig platform in Colorado.

The massive rally in the stock market, which pushed U.S. equities to another record on Wednesday could live to see yet another month, if history is any guide.

Using the quantitative tool Kensho, CNBC PRO searched for seasonality patterns in the market during the month of March. To be sure, traders use seasonal patterns as guidance, not gospel. But when a month tends to have standout gains, it's one more reason to keep buying for the bulls.

Since 1990, March stacks up as the fourth-best performing month of the year with an average gain of 1.3 percent for the S&P 500, according to Kensho. In the past two decades, those returns are even higher, with the S&P gaining 1.8 percent making it the second-best performing month of the year.


Since 1990, industrials were the best-performing stocks, posting gains 78 percent of the time with an average return of nearly 2 percent, data from Kensho show.

Other cyclical sectors such as energy and materials also performed well, posting average returns of 2.3 percent and 1.7 percent, respectively; albeit they were up in March 67 percent of the time.

Among individual S&P members in the industrials, materials and energy sectors, shares of Chevron show a strong tendency to rise.

The oil and energy company posted an average return of 3.7 percent in March, up 74 percent of the time, according to Kensho.

This week, Jefferies added Chevron to its "franchise picks" list , citing the potential for dividend payments to increase on the back of improving cash flow metrics.

Over the past 12 months, shares of Chevron are up 32 percent compared with a gain of 23 percent for the S&P energy sector.

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