First trading day of March

Next Monday will be the first trading day (FTD) of March.

The market has a tendency to be strong on the FTD of a month. And this effect has been even more pronounced in recent years.

However, since 1984 the FTSE 100 Index has on average fallen 0.05% on the March FTD, making it the weakest FTD of any month in the year.

The following chart shows the returns for every March FTD since 1984.

First trading day of March (1984-2014) [2015]

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Last trading day of February

Tomorrow will be the last trading day (LTD) of February.

Since 1984 the market has on average fallen 0.06% on the LTD of February, with positive returns in just 43% of all years, which makes it the third weakest LTD of any month in the year.

The following chart shows the FTSE 100 Index returns for every February LTD since 1984.

Last trading day of February (1984-2014) [2015]


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Shares that like/dislike March

Shares that like March

The following table lists the five FTSE 350 shares that have the best returns in March over the last ten years. For example, The Restaurant Group has an average return of 12.4% for the month of March. All stocks have risen in March for at least nine of the past ten years.

Company TIDM Avg(%)
Restaurant Group (The) 12.4
Intertek Group 8.9
Cobham 5.3
Berendsen 5.3
Victrex 2.8

 Shares that dislike March

The following table lists the five FTSE 350 shares that have the worst returns in March over the last ten years. For example, Renishaw has an average return of -4.4% for the month of March. All five stocks have fallen in at least eight of the past ten years in March.

Company TIDM Avg(%)
Renishaw -4.4
Royal Bank of Scotland Group (The) -3.5
PZ Cussons -2.9
HSBC Holdings -2.7
Smiths Group -2.5

An equally-weighted portfolio of the above strong March stocks would have out-performed every year an equally-weighted portfolio of the above weak March stocks by an average of 10.1 percentage points in March for the past ten years.

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FTSE 100 Index original share constituents

The table below lists the 100 shares that were constituents of the original FTSE 100 Index when it started 3 January 1984.

Allied – Lyons Imperial Chemical Industries
Associated British Foods Imperial Cont. Gas Association
Associated Dairies Group Imperial Group
Barclays Bank Johnson Matthey
Barratt Developments Ladbroke Group
Bass Land Securities
BAT Industries Legal & General Group
Beecham Group Lloyds Bank
Berisford (S. & W.) Lonrho
Blue Circle Industries MFI Furniture Group
BOC Group Marks & Spencer
Boots Co. Midland Bank
Bowater Corporation National Westminster Bank
BPB Industries Northern Foods
British & Commonwealth P & O Steam Navigation Co.
British Aerospace Pearson (S.) & Son
British Elect. Traction Co. Pilkington Brothers
British Home Stores Plessey Co.
British Petroleum Prudential Corporation
Britoil RMC Group
BTR Racal Electronics
Burton Group Rank Organisation
Cable & Wireless Reckitt & Colman
Cadbury Schweppes Redland
Commercial Union Assurance Reed International
Consolidated Gold Fields Rio Tinto – Zinc Corporation
Courtaulds Rowntree Mackintosh
Dalgety Royal Bank of Scotland Group
Distillers Co. Royal Insurance
CJ Rothschild Sainsbury (J.)
Edinburgh Investment Trust Scottish & Newcastle Breweries
English China Clays Sears Holdings
Exco International Sedgwick Group
Ferranti Shell Trans. & Trad. Co .
Fisons Smith & Nephew Associated Co’s.
General Accident Fire & Life Standard Chartered Bank
General Electric Standard Telephones & Cables
Glaxo Holdings Sun Alliance & London Insurance
Globe Investment Trust Sun Life Assurance Society
Grand Metropolitan THORN EMI
Great Universal Stores ‘A’ Tarmac
Guardian Royal Exchange Tesco
Guest Keen & Nettlefolds Trafalgar House
Hambro Life Assurance Trusthouse Forte
Hammerson Prop.Inv. & Dev. ‘A’ Ultramar
Hanson Trust Unilever
Harrisons & Crossfield United Biscuits
Hawker Siddeley Group Whitbread & Co. ‘A’
House of Fraser Wimpey (George)

Further info on the original index.

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UK stock market average returns by calendar day

The following chart plots the average daily returns for the 31 calendar days in a month for the FTSE 100 index over the period 1984-2015. For example, since 1984, the FTSE 100 index has on average increased 0.27% on the 1st day of each month.

FTSE 100 average returns by calendar day [1984-2015]


  1. The first day of each month has the highest average daily return for the FTSE 100 index. Followed closely by the second day of the month.
  2. The worst average daily return has been on the 20th of the month
  3. As can be seen in the chart, the periods of strongest daily returns occur in the last and final weeks of months.
  4. The pattern of daily returns in months divides into five (rather surprisingly precise) phases:
  • Phase 1 (1st-6th): the index sees positive daily returns
  • Phase 2 (7th-12th): the index sees negative daily returns
  • Phase 3 (13th-18th): the index sees positive daily returns
  • Phase 4 (19th-23rd): the index sees negative daily returns
  • Phase 5 (24th-31st): the index sees positive daily returns

The chart below replicates that above, but highlights the positive daily return phases of a month.

FTSE 100 average returns by calendar day [1984-2015] b


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Chinese New Year – year of the goat

Today is the start of the Chinese new year.

The following chart plots the average performance of the stock market for each animal year since 1950. For example, Ox years started in 1961, 1973, 1985, 1997, 2009; and the average performance of the market in those (Chinese) years was +14.0%.

NB. The Chinese calendar is based on the lunar year cycle and so performance has been calculated for each lunar year – not the corresponding calendar year.
Chinese calendar and S&P 500 average annual returns (1950-2015)
The Chinese New Year starting this week is…the Year of the Goat – which has been the best Chinese lunar year animal for the stock market.

The Chinese calendar is therefore forecasting (if history is a guide) the market will increase 17.9% from 19 February 2015 to 7 February 2016.

Note: There is some confusion in the Chinese astrological calendar over whether this is the year of the goat, the sheep, or the ram. If it turns out that this is the year of the ram, then the above figures may not provide an accurate forecast for the market in the coming year.

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FTSE 100 daily returns heatmap

This article concerns the daily returns for the FTSE 100 Index from 1984.

Average daily returns

The following table shows the average return since 1984 of the FTSE 100 Index for each day of the year. For example, over the last 31 years the average daily return for the FTSE 100 Index on 2 January has been 0.37%.

In the table, positive average daily returns are coloured green, while negative average returns are coloured red. Daily returns are highlighted dark green (red) for large positive (negative) returns. (See below for the definition of large.)

Average daily returns heatmap - FTSE 100


  1. The periods of greatest relative strength for daily returns (i.e. clusters of dark green cells in the table) would appear to be the first couple of days of each month, and the second part of December.
  2. Conversely, the period of greatest relative weakness for daily returns (i.e. clusters of dark red cells in the table) would appear to be the five-days of 20th to 24th of each month (except December).
  3. The day of the month with the greatest number of large positive returns is the 1st; while the greatest number of large negative returns is the 22nd.

Positive daily returns

The following chart is similar to the above, except this shows the proportion of positive returns for each day of the year. For example, since 1984 56% of the FTSE 100 Index returns on 2 January have been positive.

Positive daily returns heatmap - FTSE 100

Definition of large

Values are highlighted as large if they are more than 1 standard deviation from the average. For example, for the daily returns in the first chart the average daily return (for all days) is 0.03% and the standard deviation 0.24, so values are highlighted if they are above 0.27% (0.03 + 0.24) or below -0.21% (0.03 – 0.24).


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Monthly seasonality of oil

This article looks at the monthly seasonality in the price of crude oil (West Texas Intermediate, WTI).

From 1986

The following chart shows the average price change by month of WTI for the period 1986-2014. For example, since 1986 the price of WTI has increased on average 0.5% in January. 

Crude Oil (WTI) Monthly return average [1986-2014]

From the chart it can be seen that, historically, March, April and August have been strong months for WTI, while October and November have been weak.

Further, we can divide the year roughly into two parts:

  1. March-September when WTI is strong, and
  2. October- February when the WTI price has relatively been weak

The following chart plots the proportion of monthly returns that were positive over the same period. For example, since 1986 48% of the WTI price changes in January were positive.

Crude Oil (WTI) Monthly return positive [1986-2014]

The pattern here largely repeats that seen for the average returns: the strong months are March, April (with July also being strong), and the weak months are October and November.

From 2000

To assess the persistency of the behaviour, the following chart plots the average price change by month of WTI for the period 2000-2014 (i.e. this is similar to the first chart above, but the starting point is 2000 instead of 1986). . 

Crude Oil (WTI) Monthly return average [2000-2014]

Roughly, the two-part nature of the year can still be seen in the monthly performance: the WTI price is relatively strong March-August, but the now weak part of the year starts in September, through to December.

The big change in recent years can be seen in the strength of the WTI price in February: since year 2000 WTI has an average price change of +5.4%.

For completeness, the following chart plots the proportion of monthly returns that were positive over the same period.

Crude Oil (WTI) Monthly return positive [2000-2014]


Further articles on oil.

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The UK Stock Market in General Election Years

In July 1945, two months after Germany surrendered, Winston Churchill was in Potsdam at the first meeting of the heads of government of the UK, US and Russia to decide Europe’s future. On the 25th of July Churchill flew back to London to await the results of the general election that had been held that month – the first election for ten years. With the war-hero Churchill at their head, the Conservatives were confident of victory, although some of the more pessimistic forecasters thought their majority might be as low as 30. The following afternoon the results started coming in and it was soon obvious that Labour had won by a landslide. The final result was a Labour majority of 146 seats – the first time Labour had won a majority. The following day the FT Industrials Index promptly fell 3 points to 115.

Over the following few days the gloom continued and the index slumped to 105.9, although gold shares and dollar securities saw buying as a hedge against the coming socialist apocalypse. The Financial Times joined in the misery with an editorial describing the election as,

the most serious reverse since the dark days of 1940.

Nationalisation was the bogey word spooking the market – the phrase “public ownership” had appeared many times in the Labour party manifesto.

However, after the shock of a socialist government had sunk in, investors quite liked the idea of receiving compensation for their investments in some really rather dull industries, and which allowed them to re-invest in some new and more dynamic ventures. The Labour party manifesto itself had signalled the new opportunities,

The genius of British scientists and technicians who have produced radio-location, jet propulsion, penicillin. and the Mulberry Harbours in wartime, must be given full rein in peacetime too.

Well, perhaps not Mulberry Harbours but, yes, the future looked bright for British industry to exploit the new advances in electronics, radio and television, textiles, chemicals, plastics and pharmaceuticals.

A few months later, by the time of Chancellor Dalton’s first budget, the FT Industrials Index had recovered nearly all the ground lost since the election. The FT described the budget as a “tonic for both industry and labour”, and when in December the government announced the nationalisation of 850 coal industry entities, the market shrugged and share prices rose.

The 1945 election obviously took place at an exceptional time, but the reaction stages of the stock market are similar to those in other general election years. An example can be seen in the following chart of the market in the year 1983: the market rose before the election, sold off on the result, but ended the year higher.

The UK Stock Market in General Election Years_1

There have been 18 elections since WWII, and the market has ended the year higher than it started for 12 of those elections. The following chart shows the annual return for the FTSE All-Share index in each election year since WWII.

The UK Stock Market in General Election Years_2

The average return in those 17 election years (in 1974 there were two elections) was 3.0%. Hence, historical precedent would suggest that the UK market will see a positive return in 2015.

Another election to consider here might be the US presidential election in 2016: the last time the US market fell in a pre-presidential election year was in 1939, and the average return in these years has been 17%. Given the strong correlation between the US and UK markets, this could be another factor suggesting a positive return for 2015.

The above chart indicates which party won the most seats in each election year: both the Conservatives (blue) and Labour (red) have won the most seats in nine general elections since 1945. But in the nine years that the Conservatives won the most seats, the market has risen eight times with an average annual return of 10.8%; while for Labour the market only rose in three years and the average annual return was -5.8%

The following chart shows the average performance of the stock market in the months around the election itself.

The UK Stock Market in General Election Years_3

On average the market has risen two months before an election, with an average return of 0.32%. But after that the returns in the following three months are all negative, with the second month after the election seeing an average return of -1.3%.

In 2015 the general election will take place on 7 May, in which case history would suggest that the following two-month period up to 7 July will see a weak market. Of course, this period will overlap with the Sell in May effect which often sees a weaker market at this time of the year anyway.

In summary, the historical precedent suggests that the market will end higher in the election year 2015 than it starts. Although such forecasts would most likely not have been supported by Winston Churchill, who said,

I always avoid prophesying beforehand, because it is much better policy to prophesy after the event has taken place.



  1. Reference source for the 1945 general election: George Blakey’s A History of the London Stock Market
  2. Article first appeared in Investment Advisor.


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Average market behaviour in February (2015)

The following chart plots the average performance of the FTSE 100 Index during February since 1984.

Average month chart - February (2015)

As can be seen, historically the market tends to rise for the first two-and-a-half weeks and then drifts lower for the rest of the month.

January 2015

The following chart shows the average performance of the market in January (1984-2014) and overlays the actual performance in January 2015.

Average month chart - January overlay January 2015 (2014)

The market was unusually strong around the third week of the month, which led to its out-performance of the historic average for the month.


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