Since 1983, intraday performance on quarter-end has had a dramatic set of swings: from a boring morning to a dramatic afternoon rally and brutal selloff into the close. In the chart below, we show the average and median performance of the S&P 500 (as a percentage change versus the prior day’s close) for all quarter ends since 1983. The market tends towards little change in the morning before running all the way to session highs at 3:00 PM across the course of the afternoon. That tends to preclude an unwind into the close, though, with stocks dropping all the way to flat to down just before the close. The key takeaway for today? Don’t get lulled into complacency by a boring morning or solid start to the afternoon.
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Conditions headed into the last day of trading tend to be very important as well. Since 1983, months with stocks down on a month-to-date basis heading into the final day have seen steady rallies and a close at the highs. The opposite is true for periods when stocks have been up month-to-date on the last trading day. In both cases, quarter-end rebalancing is likely playing a large role. On the other hand, shorter-term rallies like the move seen this week have less of an impact, generally.
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