Almanac Trader

NASDAQ finished the first half of 2023 with a stellar 31.7% gain. This is NASDAQ’s third best first half ever. Only 1975 and 1983 were better. In the following table we compiled all years since 1971 when NASDAQ was up 20% or more in the first half. Reviewing the table, we observed only two times out of the past eleven where the second half of the year was better than the first half (1999 and 2003). July and Q3 were also below average following a 20%+ first half gain while Q4 was better than average. 

This reinforces our existing tepid outlook for Q3. Today’s much stronger than anticipated jobs data has increased expectations for another Fed interest rate hike and added more uncertainty as to when the Fed will eventually pause. Increasing uncertainty is likely to lead to more volatility and a sideways to possibly lower market during the historically weak third quarter.