5 Stocks To Sizzle In Lazy June

June typically marks the beginning of weak summer trade. Be it Lehman Bros’ collapse or the Fed's stimulus scale back or Greece's running out of money or the more recent “Brexit” -- investors have had to absorb all these shocks in the month of June. But, rather than markets dealing with such big setbacks, the most likely outcome this time around will be a gradual uptick since economic and earnings scenarios are reassuring.

Investors have also chosen to ignore stalled out congressional effort on tax reform and controversies swirling around President Donald Trump’s campaign and Russia. Lest we forget, the S&P 500 is up more than 7.5% this year and one of the “FANG” stocks, Amazon.com, Inc. (AMZN - Free Report) touched the psychological $1,000 mile mark. Banking on such positives, investing in some solid stocks that can make the most of a lazy June will be prudent.

June on an Average is Flattish

Will stocks take a pause and move sideways this summer? The equity market in June has mostly traded lower, while it is also the fourth worst month in terms of the S&P 500’s performance. While September is historically the worst month, August has been the second followed by February. But, losses in June have been miniscule, averaging a meagre 0.005% decline in the S&P 500 all the way back to World War II, according to Sam Stovall, chief investment strategist at CFRA.

The broader market has had bad summers, such as the 7.8% drop in 2008 when investors sensed trouble at Lehman Bros before its bankruptcy. In fact, the markets witnessed a 10% decrease when the U.S. budget woes gripped investors’ sentiments or the 12% drop in 2015 when Greece’s debt crisis sent jitters across the global stock market. All these incidents posed significant threat to the U.S. economy and its financial stability.

This June, China’s debt bubble could pose a legitimate threat, while the markets might be adversely affected if Congress looks unlikely to pass tax reforms this year. Political turmoil affecting President Trump and North Korea’s nuclear missile threat could add to the woes. But, investors have chosen to look past these concerns as economic conditions are expected to improve, while corporate profits should continue to be strong. Earnings were not only very strong in the first quarter; companies also did a commendable job to improve the overall outlook for this year.

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