The stock market does better during the first two weeks of April than during the first two weeks of any other month. Is the IRS to credit?
Dennis Slothower, publisher of "On the Money" and other newsletters, wrote several years ago that "the government has a vested interest in making sure there is plenty of liquidity in the marketplace for those needing to pay what is shortly due Uncle Sam," reports MarketWatch columnist Mark Hulbert
So the government will act to make "sure the [stock] market holds together as best it can going into Tax Day," Slothower says.
That sent Hulbert in search of data.
He found that since 1955, when April 15 became the tax payment date, the Dow Jones Industrial Average has averaged a gain of 1.2 percent during the first two weeks of April. That compares with an average of only 0.3 percent for the first two weeks of all 12 months.
This doesn't mean the IRS is behind the first half of April's outperformance, Hulbert acknowledges. "Yet it remains a likely culprit," he writes. "I couldn't find support for the other possible explanations I could think of."
Elsewhere on the equity front, stock-market guru Jeremy Siegel, a professor of finance at the University of Pennsylvania, predicted at the beginning of 2015 that the Dow would hit 20,000 by year-end, and he's sticking with that forecast.
"I think we're in a range-bound market now, maybe 17,000 to 18,500. But I still believe 20,000 is the fair market value of the Dow given interest rates," he tells CNBC
"It's not going to be there in the next month or two. Maybe by the end of the year if things go well. We're in a choppy market [now]."
The Dow closed at 17,712.66 Friday, 3.1 percent below its March 2 record of 18,288.60
"We need to see the dollar stabilize, maybe even sink down a little bit" to boost earnings, giving stocks impetus to rise, Siegel notes. Numerous companies have reported that the dollar's strength — it has risen to multi-year highs against a range of currencies in recent weeks — is biting into their earnings.
© 2024 Newsmax Finance. All rights reserved.