What is the current trend in the stock market in April?

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The seasonals are pointing to higher stock prices in April for the stock market – Here is the summary of current trends in the stock market in April to help you get started.

The current market environment

One of the most difficult investment decisions is to buy stock prices when they look their worst. Global equity prices have been trading under pressure, driven lower by technology stocks. The continued analysis of the US 2016 elections have shed a negative light on Facebook, which has led stock prices down with more than an impressive 23% decline from its all-time highs hit in February. Before the Facebook news started to weigh on stocks, the White House added volatility to the capital markets by unleashing an unexpected trade war. The initial plan was to add tariffs to all imports of steel and aluminum. This now appears to be a negotiating tactic and has morphed into a trade negotiation specifically with China.

The seasonals in April look promising

Heading into April, riskier asset are on the defensive but there is good news for investors who think April will be a better month. The seasonal returns in April have been very strong over the past two decades. A seasonal study evaluates the returns for a specific period, and then averages those returns both in terms of percent up or down as well as the average total return.

An analysis of the S&P 500 index shows that April is a kind month. The large cap index has increased 75% of the time in April over the past 20 years. The average gain during that two-decade period is 1.8%. This includes two recessions (the great recession in 2008-2010, and the recession following 911 (2002-2003)