This is the last day of October for stocks and markets are enjoying an alarming climb to higher peaks, but if this statistical trend for equity benchmarks persists, there is much more room for work.
Dow Jones Data Group data from 1950 indicate that when the Dow Jones Industrial Average
and the S&P 500 index
are pretty much at the end of October, as now, the positive return for the rest of the year is almost certain.
And these profits are historically remarkably stellar.
In particular, when the Dow rises by at least 1
Similarly, when the S&P 500 gained at least 20% by October 31 – that's 21.17% thus far, as of Thursday – the benchmark return is average 6.21% for the rest of the year, with an average full year profit of 33.8%.
Although the Nasdaq does not boast a flawless record, the index has gained 90% of the time it has grown by at least 20% so far this year (as of Thursday, this is 24.97% so far in 2019), show data, with an average return of 7.48% for the remaining two months and a year-end profit of 42.81%.
To be sure, past results are absolutely no indication of future returns, and US stocks on Thursday fell amid mounting concerns over the likelihood that the United States would soon find a genuine trade agreement with China and, as an impeachment inquiry, vote on President Donald Trump was accepted into the House.
This weakening comes a day after the S&P 500 index hit a record close following the Federal Reserve's decision to cut interest rates for the third time this year, while also signaling it would pause before taking further monetary policy steps.
Following a series of political concerns, including the US trade dispute with China and the UK's long-term disputed plan to exit the European Union, all three indicators are on pace to close a historically volatile period for equities in positive territory. The Dow ended 0.48% in October, the S&P 500 boasted 2.04% monthly profit, and the Nasdaq jumped 3.66% in October.
Read: To sell the stock market in May and go? According to specialists
the not-so-fast trading in October did not start with a serious note, however, the Dow, S&P 500 and Nasdaq registered losses of one to one of at least 1% before stabilizing at the beginning of the month.
Stocks are now entering a historic period, which was a strong period for the stock markets. The data show that November to January is the strongest quarterly duration of the year, with average earnings in November being 5.94% and December 5.1%.