Institutional Insights: Pictet Sales & Trading 'March Seasonality'
March’s seasonality picture is surprisingly constructive for US equities, awkward for bonds, and historically supportive for oil/commodities—with the big caveat that macro/geopolitical shocks are already distorting the “typical” path (especially in crude). Below is an exec-style set of actionable takeaways distilled from the note.
Executive summary
1) US equities: seasonality tailwind, but “path” matters
Base case: March tends to be positive more often than not for the S&P 500 (since 1990: ~+1.0% avg, ~64% positive months).
Key nuance: March 2020 is a major outlier; excluding 2020, March ranks as one of the strongest months in the post-1990 sample (per the note).
Tactical implication: Expect choppier/trend-following behavior early March, with historically healthier performance later in the month.
Action: If adding equity risk, consider staging adds (lighter early March, more willingness to add on dips mid/late-month), rather than “all-in day 1.”
2) “Jan + Feb up” is a bullish conditional signal
In years since 1990 where both January and February were positive, March improved (note cites ~+1.4% avg and ~71% positive occurrences).
Even more important: those years showed a strong March–December follow-through (note cites ~93% positive occurrence and ~+13.1% avg).
Action: Use any early-March weakness as a buy-the-dip framework, with a bias to maintain core equity exposure if the year started positive.
3) Watch the “least favorable” YTD setup: slightly positive YTD into March
If end-Feb YTD is slightly positive (0–+5%), the note shows average March ~0%—i.e., seasonality can flatten despite being broadly positive in other regimes.
Action: Pair equity adds with defined-risk hedges (tight risk limits, collars, or put spreads) if positioning into March is already moderately long.
Sector positioning (US): broad tailwinds, specific tilts
4) Tilt toward Real Estate, Energy, Tech, Consumer Discretionary (seasonal support)
Real Estate: strongest seasonal rebound signal in the note.
Energy / Tech / Consumer Discretionary: strong early-year seasonality that continues through March (note cites March legs around +1.6% Energy, +0.8% Tech, +1.4% Cons Disc on average).
Action: Overweight/lean into these sectors versus market, but prefer liquid expressions (sector ETFs, baskets) if volatility picks up.
5) “Defensives rebound” angle: Utilities & Telecom
Utilities and Telecom historically show rebound characteristics in March.
Action: If you want equity exposure with a calmer profile, use Utilities/Telecom as a partial ballast rather than reducing equities outright.
6) Healthcare: weakest seasonal, but still positive
Healthcare screens weakest on the seasonal lens, though still positive per the note.
Action: Treat Healthcare as neutral/underweight at the margin for seasonal-only trades unless other catalysts dominate.
Other asset classes
7) Bonds: March is historically the toughest month
The note flags March as historically worst month for bonds (proxied by US 10Y futures), within a broader weak window Feb–Apr.
Action: Be cautious adding duration in early March; if you must hold duration, consider tactical hedging (e.g., futures overlay) or favor front-end/less duration-sensitive exposures.
8) Oil & commodities: strongest seasonal window begins (Mar–Jun), but crude already ran
Seasonality supports oil/commodities from March into June.
This year crude is already ~+14% YTD vs typical ~+1% by end-Feb (per note), driven by geopolitical shocks—so the market is ahead of schedule.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!