Coppo: 8 charts on May seasonal strength and weakness

Richard Coppleson

With bank reporting kicking off as we enter the seasonally weak month of May, I’ve looked at data back to 2000 to highlight some of the best and worst sectors. ANZ and WBC are stand out underperformers and there’s one sector that shows up as seasonally strong.

3 of the 4 banks go ex dividend in May and November – but some years falls are well in excess of the ex-div move

How the individual banks have traded in May – not a great record

Looking at the 2 worst Banks in May – Westpac & ANZ

The last 13 years – since 2005 – have been absolute shockers… even though they go ex dividend they are dropping by far more than that…

Westpac over the last 13 years

ANZ over the last 13 years

Looking at which sectors have been the best & worst in May since 2000

Best and worst sector moves since May 2000

Oil stocks have been a stand out in May

Energy has been the standout – there are plenty of reasons why and it’s usually due to a seasonal strength in the oil price from early May through to July as the US / European summers see increased demand and driving season begins

Looking at the Energy sector’s moves in all the May’s since 2000

The Energy Sector has been up 11 out of the last 17 years – but look at the past 7 years – not a great record

  • Energy has in the last 3 years done well in April (+7.6% in 2016, +8.52% in 2015 and +3.5% in 2014)
  • But this year (April 2017) Energy was down -0.63% in April
  • So maybe we get the mean reversion and this May is a good one for Oil stocks

The Coppo Report

This article is an excerpt from The Coppo Report contributed to Livewire by Richard Coppleson, Director - Institutional Sales and Trading, Bell Potter

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