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MARKET OUTLOOK:
Seasonality for equity markets supports a strong July, followed by weakness through August and September. This is within the context of the “boring middle” of a new four-year cycle (three to five-year cyclical equity bull market). The Vanguard Total Stock Market ETF (VTI) historically supports positive seasonality through July before stalling in August and September. This implies that strength in July is an opportunity to position for weakness through the summer doldrums of the third quarter. We highlight uranium and homebuilders as two sectors at particular risk of a summer correction.
Our technical work suggests that equity markets are in phase two of the market cycle model, which we view as the boring middle as the underlying economy begins to…
