Brendan McDermid/REUTERS
- April is a strong month for the S&P 500, with the index gaining in 14 of the past 15 years, says LPL Financial's chief market strategist.
- Over the past 20 years, April has been the strongest month for stocks, the strategist wrote.
- The S&P 500 was at a record high as the benchmark wrapped up the first quarter of 2020.
- See more stories on Insider's business page.
April is a bullish month for US stocks, with the S&P 500 index producing wins for the month for more than a decade, says one chart strategist who also noted that double-digit monthly gains tend to set up equities for further strength.
"What more can we say other than few months have been kinder to stocks lately than the month of April," Ryan Detrick, chief market strategist at LPL Financial, wrote in a note Wednesday as Wall Street wrapped up trading for March.
The benchmark S&P 500 was on course to rise by more than 6% for March and hovered at a record high Wednesday as investors prepared for President Joe Biden to unveil a potential $2 trillion infrastructure bill focusing on investments in roads, bridges, broadband, and other areas.
The upward momentum could keep going in April, a month in which stocks have ended with gains in 14 out of the past 15 years, said Detrick. "Other than my Cincinnati Bengals breaking my heart, few things are more consistent than stocks higher in April."
In April 2020 – when the COVID-19 pandemic was accelerating in the US – the S&P 500 index charged up by 12.7%, one of the strongest one-month gains on record, Detrick said. He added that months that end with stock gains of 10% or more "usually kick off strength," rather than mark the end of it.
In May 2020, the S&P 500 closed up by 4.5%, and the index subsequently produced a six-month return of 12.3%.
Underscoring April's strength, the month has been the best for stocks in the past 20 years and has been the second-best month since 1950, the strategist added.
"Taking it a step further ... the average April ... sprints out to impressive gains the first 18 days or so, then it coasts in like Usain Bolt in a race," he said, referring to the eight-time Olympic gold medalist sprinter from Jamaica.