Historical data suggests that this bullishness will extend into the second half of the year. Since 1928, there have been 29 years when the S&P 500 was up 10% or more at the halfway mark. By year-end, the average gain was 24%. In each of the prior 12 instances of strong starts to the year going back to 1988, the second half of the year closed positive.

However, it’s important to note that while July has a respectable 1.4% average return, the percentage of years with positive returns drops to 59% from 83% the month prior. The monthly seasonal pattern turns lackluster in August, with a 0.4% average gain and 52% loss rate, and outright negative average returns in September and October.

Despite these sideways tendencies, bullish tailwinds reaccelerate from November into year-end, just in time for the Santa Claus rally. Historical seasonality patterns only account for up to a third of price returns, and unexpected catalysts can quickly tip the scales the other direction.

In conclusion, while we might expect some more strength in early July, the traditional election market patterns will likely take over. Despite the potential for volatility, historical data suggests a bullish outlook for stocks in the second half of 2024.