According to Bespoke, Tuesday’s market action was the second worst start to June in the last 50 years.
Only the first trading day of June 2002 was worse with a decline of 2.48%. Below we highlight all first days of June that have been down over the last 50 years. We also provide the index’s performance through the end of the month. For Junes that have started the month down, the S&P has averaged a rest-of-month decline of 0.53%.
Take a look at the table and you will see the closest two data points led to some very rough returns.
Considering the fact that we just completed the worst May in 50 years, it is clear that the market is vulnerable and investors (professional and retail alike) are pairing back their risk exposure and looking for safety.
Consumers remain under pressure and if inflation and/or unemployment statistics begin to tick higher, the pain will be felt not just on Wall Street but more importantly on Main Street. Investors should be looking for defensive businesses that can survive and even thrive in a weak environment for consumers. Direct payday lenders like First Cash Financial (FCFS) and Cash America (CSH) may be worth watching as they have backed off in recent months but are fundamentally still relatively strong.A Season of “Worsts”