Best of the Week
Most Popular
1. Climate Change Mass Extinction - Birds, Bees and Bugs: Going Going Gone - Richard_Mills
2.A Purrrfect Gold Price Setup! - Peter_Degraaf
3.Who Finances America's Borrowing? Recession Indicator for Independent Thinkers Part 2 - F_F_Wiley
4.America’s One-sided Domestic Financial War - Raymond_Matison
5.Gold Price Summer Doldrums - Zeal_LLC
6.Two Key Events Will Unleash Gold - Jim_Willie_CB
7.Billionaire Schools Teacher in NAFTA Trade Talks - Richard_Mills
8.Get Out Of Crypto Cannabis Bubble Before It Pops and Move Into Bargain Basement Miners - Jeb_Handwerger
9.Stock Market Could Pullback for 1-2 weeks, But Medium Term Bullish - Troy_Bombardia
10.G7 Chaos, Central Banks and US Fed Will Drive Stock Prices This Week - Chris_Vermeulen
Last 7 days
Trump Manchurian President Embarrasses Putin By Farcically Blowing his Russian Agent Cover - 19th Jul 18
The Fonzie–Ponzi Theory of Government Debt: An Update - 19th Jul 18
Will the Fed’s Interest Rate Tightening Trigger Another Financial Crisis? - 18th Jul 18
Stock Market Investor “Buy the Dip” Mentality is Still Strong, Which is Bullish for Stocks - 18th Jul 18
Stock Market Longer-Term Charts Show Incredible Potential - 18th Jul 18
A Better Yield Curve for Predicting the Stock Market is Bullish - 18th Jul 18
U.S. Stock Market Cycles Update - 18th Jul 18
Cayton Bay Hoseasons Caravan Park Holiday Summer 2018 Review - 18th Jul 18
What Did Crude Oil - Platinum Link Tell Us Last Week? - 17th Jul 18
Gold And The Elusive Chase For Profits - 17th Jul 18
Crude Oil May Not Find Support Above $60 This Time - 17th Jul 18
How Crazy It Is to Short Gold with RSI Close to 30 - 16th Jul 18
Markets Pay Attention Moment - China’s Bubble Economy Ripe for Bursting - 16th Jul 18
Stock Market Uptrend Continues, But... - 16th Jul 18
Emerging Markets Could Be Starting A Relief Rally - 16th Jul 18
(Only) a Near-term Stock Market Top? - 16th Jul 18
Trump Fee-Fi-Foe-Fum Declares European Union America's Enemy! - 16th Jul 18
US Stocks Set For Further Advances As Q2 Earnings Start - 15th Jul 18
Stock Market vs. Gold, Long-term Treasury Yields, 10yr-2yr Yield Curve 3 Amigo's Update - 15th Jul 18
China vs the US - The Road to War - 14th Jul 18
Uncle Sam’s Debt-Money System Is Immoral, Tantamount to Theft - 14th Jul 18
Staying in a Caravan - UK Summer Holidays 2018 - Cayton Bay Hoseasons Holiday Park - 14th Jul 18
Gold Stocks Summer Lows - 14th Jul 18
Trump US Trade War With China, Europe Consequences, Implications and Forecasts - 13th Jul 18
Gold Standard Requirements & Currency Crisis - 13th Jul 18
Focus on the Greenback, Will USD Fall Below Euro 1.6? - 13th Jul 18
Stock Market Outlook 2018 - Bullish or Bearish - 13th Jul 18
Rising Inflation is Not Bearish for Stocks - 13th Jul 18
Bitcoin Picture Less Than Pretty - 13th Jul 18
How International Observers Undervalue the Chinese Bond Market - 13th Jul 18
Stocks Trying to Break Higher Again, Will They? - 12th Jul 18
The Rise and Fall of Global Trade – Redux - 12th Jul 18
Corporate Earnings Q2 2018 Will Probably be Strong. What This Means for Stocks - 12th Jul 18
Is the Relative Strength in Gold Miners to Gold Price Significant? - 12th Jul 18
Live Cattle Commodity Trading Analysis - 12th Jul 18
Gold’s & Silver’s Reversals’ Reversal - 12th Jul 18
The Value of Bitcoin - 11th Jul 18
America a Nation Built on Lies - 11th Jul 18
China, Asia and Emerging Markets Could Result In Chaos - 11th Jul 18
Bullish Gold Markets in the Big Picture? - 11th Jul 18
A Public Bank for Los Angeles? City Council Puts It to the Voters - 11th Jul 18
Yield Curve Inversion a Remarkably Accurate Warning Indicator For Economic & Market Peril - 11th Jul 18
Argentina Should Scrap the Peso and Dollarize - 11th Jul 18
Can the Stock Market Close Higher For a Record 10th Year in a Row? - 11th Jul 18
Why Life Insurance Is A Must In Financial Planning - 9th Jul 18
Crude Oil Possibly Setting Up For A Big Downside Move - 9th Jul 18
BREAKING: New Tech Just Unlocked A Trillion Barrels Of Oil - 9th Jul 18
How Trade Wars Penalize Asian Currencies - 9th Jul 18
Another Stock Market Drop Next Week? - 9th Jul 18
Are the Stock Market Bulls Starting to Run? - 9th Jul 18

Market Oracle FREE Newsletter

5 "Tells" that the Stock Markets Are About to Reverse

Global Stock Markets “Turn-of-the-Month” Effect Returns Analysis

Stock-Markets / Stock Markets 2018 May 03, 2018 - 11:41 AM GMT

By: Dimitri_Speck

Stock-Markets

In Other Global Markets the “Turn-of-the-Month” Effect Generates Even Bigger Returns than in the US

Dear Investor,

the “turn-of-the-month” effect is one of the most fascinating stock market phenomena.

It describes the fact that price gains primarily tend to occur around the turn of the month. By contrast, the rest of the time around the middle of the month is typically less profitable for investors. 

The effect has been examined extensively in the US market. In the last issue of Seasonal Insights I have shown the extent of the “turn-of-the-month” effect in the eleven largest international stock markets.


The result was that overseas markets also tend to be significantly stronger around the turn of the month than around the middle of the month – in all the countries under review the effect was even more pronounced than in the US!

The turn-of-the-month pattern in 11 countries

The following charts show the cumulative returns achieved over time in all eleven countries around the turn of the month (blue lines) and around the middle of the month (red lines).

I have measured the average return of investing in these indexes in the time period from the 26th of each month to the 5th of the subsequent month, i.e., over a period of slightly less than two weeks around the turn of the month. Then I compared this return with that achieved by investing during the rest of the time around the middle of the month, i.e., from the 6th to the 25th of each month.


Canada: Cumulative return around the turn of the month (blue line) and over the rest of the time (red line), indexed (100)
The returns of turn-of-the-month period clearly beat those achieved around the middle of the month!
Source: Seasonax

China: Cumulative return around the turn of the month (blue line) and over the rest of the time (red line), indexed (100)  


The mid-month period only scores in bull markets
Source: Seasonax

France: Cumulative return around the turn of the month (blue line) and over the rest of the time (red line), indexed (100)

The mid-month period sags
Source: Seasonax

Germany: Cumulative return around the turn of the month (blue line) and over the rest of the time (red line), indexed (100)

The mid-month period is barely visible on the chart
Source: Seasonax

Hong Kong: Cumulative return around the turn of the month (blue line) and over the rest of the time (red line), indexed (100)

The mid-month period outperformed only temporarily 
Source: Seasonax

India: Cumulative return around the turn of the month (blue line) and over the rest of the time (red line), indexed (100)

The turn-of-the-month period has been leading for years
Source: Seasonax

Japan: Cumulative return around the turn of the month (blue line) and over the rest of the time (red line), indexed (100) 

In Japan the market's turn-of-the-month performance is noticeably stronger as well
Source: Seasonax

Korea: Cumulative return around the turn of the month (blue line) and over the rest of the time (red line), indexed (100) 

It seems the mid-month period is trying to hide (it is probably ashamed)
Source: Seasonax

Taiwan: Cumulative return around the turn of the month (blue line) and over the rest of the time (red line), indexed (100) 

In Taiwan's stock market the turn-of-the-month period also beats the mid-month period hands-down
Source: Seasonax

Great Britain: Cumulative return around the turn of the month (blue line) and over the rest of the time (red line), indexed (100) 

The turn-of-the-month period outperforms steadily
Source: Seasonax
US: Cumulative return around the turn of the month (blue line) and over the rest of the time (red line), indexed (100) 

Funny enough, of all markets the US market exhibits the smallest difference between the returns achieved in the two time periods
Source: Seasonax

As you can see, stock market investments generate significantly larger gains around the turn-of-the-month than around the middle of the month all over the world. Clearly this is a globally relevant phenomenon.

The turn-of-the-month effect is even more pronounced in overseas markets than in the US

Below I once again show you a table detailing the returns of the turn-of-the-month period compared to those achieved in the mid-month period in the eleven countries under review. 

Turn-of-the-month effect in selected countries

The turn-of-the-month period clearly outperformed the mid-month period in all eleven countries.
Source: Seasonax

The column designated “Diff” shows the excess return of the turn-of-the-month period over the mid-month period. As a glance at this column immediately makes clear, the gains achieved by investing in the turn-of-the-month period are beating those of the mid-month period in all eleven countries, in most cases by quite a significant amount! These excess returns are achieved despite the fact that the time period during which the turn-of-the-month effect occurs is actually slightly shorter. 
As the table illustrates, the strength exhibited by the stock market around the turn of the month is a global phenomenon. This is a very simple pattern. There exist a great many more seasonal patterns, which can be identified with the Seasonax app on Bloomberg and/or Thomson-Reuters. Many of these patterns are still completely unknown – and potentially offer even more substantial outperformance.

Yours sincerely,

Dimitri Speck

Seasonax.com

Founder of Seasonax and Head Analyst 90 Tage Trader

PS: With the Seasonax event tool you can create your own event studies!

© 2018 Copyright Dimitri Speck - All Rights Reserved - Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules