We are now two months into 2025, and we are closely following the same path of the average post election cycle. What's next?
Here’s the chart:
Let's break down what the chart shows:
The blue line represents the average return in post election years since 1950 for the S&P 500.
The red line represents the S&P 500 in 2025.
The Takeaway: In the first two months of the year, the S&P 500 has followed its typical pattern for the post-election cycle.
Up in January.
Down in February.
If stocks continue to follow this seasonal trend, we may have seen the bottom for the market. I wouldn’t be surprised to see stocks rip higher into the end of the year, given that the average post election cycle is now transitioning into a tailwind for stocks.
However, if we start to see weakness during what is typically a strong seasonal period for stocks, that would pique my interest much more. For now, stocks are simply following their usual seasonal tendencies.
Grant Hawkridge | Chief Aussie Operator, All Star Charts
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