Bank of America, through its technical strategist Paul Ciana, has analyzed seasonal trends that suggest a favorable outlook for the Nasdaq 100 and the U.S. dollar in the upcoming third quarter. Ciana noted that historically, the Nasdaq 100 has performed well in third quarters since 2018, with July showing a strong average gain of 1.72%. However, he cautioned that September tends to be weaker.
The analysis indicates that investors might consider going long on U.S. equities and the dollar while shorting Treasurys and commodities. Additionally, the bank highlighted that the third quarter has typically seen a decline in global bond yields, particularly in developed markets outside the U.S., with German Bund yields falling about 64% of the time during this period.
BofA also pointed out specific trades that have historically outperformed, such as the strength of the U.S. dollar against the Brazilian real and South African rand, and the potential for copper prices to rise in July, which has occurred about 65% of the time with an average gain of 1.84%.
This analysis provides investors with actionable insights based on historical performance patterns as they navigate the market in the context of the current presidential cycle