3 Summertime Sectors to Watch
Assuming the summer of 2016 is like most, the next few months are likely to be fairly quiet for stocks. There's simply not a lot going on economically to stir the earnings spot, so to speak (good or bad), an even if there was, many traders are focused on matters other than the market during this highly-distracting time of year. The average gain for the May-through-August span? A mere 0.6%.
Yet, there are a handful of industries that tend to dish out summer gains while most others are stuck in the mud. Here's a quick look at some of the most interesting summertime bets (in no particular order).
Distillers
Distillers are in interesting group. Even when these stocks -- names like Diageo (DEO) and Constellation Brands (STZ) -- are on pace for a losing year, the months of May, June, and July tend to be bullish ones. The average gain for distillers over the course of that three-month span is 4.4%.
Household Products
Generally speaking, household product stocks like Clorox (CLX) and Colgate-Palmolive (CL) might get a slow start, floundering a bit in May. By June though, they're in full swing, en route to a 4.5% gain between the months of June, July, August AND September. A main Consumer Staples ETF is (XLP)
Water Utilities
Last but not least, though April can be rough on water utility stocks like Aqua America (WTR) and American Water Works Company (AWK), water stocks tend to start a sizeable and reliable rebound by May that doesn't stock until late September. And this advance tends to take shape in good years as well as bad. The average late-May-through-late-September gain for water utility names is a healthy 7.3%. (XLU) is the most well-known Utility ETF.
Obviously trading nothing but the calendar isn't advisable; Murphy's law says that the one time a sector or industry bucks its trend will be the one you decide to trade it. But, knowing the tendencies ahead of time helps put other clues and cues in context, confirming or denying them.