The recent string of better than feared US economic data has allowed equity markets to price out some of the more severe recession fears. Last week the US ISM manufacturing print beat markets expectations at 52.8. The ISM services print did too printing 56.7 (vs 53.5 expected) and Friday’s headline NFP print was well above expectations at 528K.

However, despite the strong gains from June’s swing low across major indexes, most analysts remain cautious and see this as a ‘bear market rally’. So, this is where seasonals can help. Will we see a period of weakness across major indexes between now and October? Look at the weaker seasonals for the S&P500, DAX, Nasdaq, and FTSE.

Major Trade Risks: If economic data can continue surprising to the upside then there is a risk that the ‘bear market rally’ may turn into a new bull market.

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