Tuesday, August 7, 2007

5 Economic cycles and their effect on stocks

Trends can drawn based on any variable that effects the market. The following are some of my observations and would appreciate corrections and/or additions in the comments.

June - October [Hurricane Season] + Oil (COP,XOM) - Transportation/Airlines (AMR) - Insurance

September - October [End of 3Q] - Historically, these two months are weak months

December [Santa Rally] + Market is typically bullish during holiday month

Declining USD + Commodities (traded in USD) + US Exporters (HPC, KO) - Non US based exporters (INFY) + Large cap, especially due to their exports + International travel industry

Lower Interest Rates + Institutional Financial Institutes + Construction