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Articles / global-fx-macro / July rally may be in store for stocks after weak June, Freedom's Jay Woods says

July rally may be in store for stocks after weak June, Freedom's Jay Woods says

S&P 500 June Decline
3%
The decline of the S&P 500 in June with two trading days remaining.
Historical July Advances
8 years
The number of consecutive years the S&P 500 advanced in July following a negative June.
General Mills Year-to-Date Decline
22%
The decline in the stock price of General Mills year-to-date.

§ 01 Executive Snapshot

  • What: U.S. stocks may experience a rally in July following a weak June.
  • Who: Jay Woods, Chief Market Strategist at Freedom Capital Markets.
  • Why it matters: Historical trends suggest a July recovery after negative June performance, impacting investor sentiment and market strategies.

§ 02 Key Developments

  • The S&P 500 is down about 3% in June with two trading days remaining.
  • Historically, the S&P 500 has advanced in July during each of the last eight years after a negative June.
  • Woods noted the index is forming a potential head-and-shoulders pattern and must hold above its 50-day moving average for bullish momentum.

§ 03 Strategic Context

  • Historical trading patterns indicate that July often brings recovery for the S&P 500 after a weak June, suggesting seasonal factors play a role in market movements.
  • Investors are closely monitoring technical indicators to guide trading decisions, especially in light of recent market volatility.

§ 04 Strategic Implications

  • A July rally could bolster investor confidence and impact trading strategies for equities, particularly if the S&P 500 maintains its technical support levels.
  • Long-term implications may involve adjustments in investor positioning based on Federal Reserve policies and inflation readings.

§ 05 Risks & Constraints

  • Potential risks include a failure to reclaim key technical levels, which could lead to bearish momentum and market corrections.
  • The upcoming employment report could disrupt market trends if it deviates from expectations, affecting inflation concerns and Federal Reserve policy.

§ 06 Watchlist / Forward Signals

  • Investors should monitor the S&P 500's performance relative to its 50-day moving average for signs of bullish momentum.
  • Key levels to watch include the May 5 gap around 7,250 as important technical support and the upcoming employment report for economic insights.
§ 07

Frequently Asked Questions

What does Jay Woods predict for U.S. stocks in July?

Jay Woods predicts that U.S. stocks may experience a rally in July following a weak June.

Why is July historically significant for the S&P 500?

Historically, the S&P 500 has advanced in July during each of the last eight years after a negative June.

How should investors prepare for potential market changes?

Investors should monitor the S&P 500's performance relative to its 50-day moving average and be aware of key technical support levels.

What risks could affect the stock market's performance in July?

Potential risks include a failure to reclaim key technical levels and the impact of the upcoming employment report on inflation concerns.

§ 08

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