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End-Of-Q1 Weakness May Be Over

Over the past 27 years the DJIA and S&P 500 have declined 17 times and advanced 10 with an average loss approaching of about 0.75% near the end of March. Excluding advancing years, the average decline is right around 1.6% for DJIA and S&P 500. End-of-quarter portfolio restructuring likely plays a role as managers lock in any gains and establish positions for the next quarter. These declines can begin on either the fourth-to-last trading day or the third.

However, coming into this stretch with March down month-to-date as it is this year has mitigated losses on several occasions. Of the 7 times this DJIA was down MTD in March since 1990 month-end was up 5 times. For the S&P, the 7 down MTDs were followed by 4 gains. So perhaps the healthcare disappointment had managers restructuring a wee early and the next few days will be stronger than usual. Depends what comes out of DC though…