With Independence Day behind us, traders are looking ahead to what July will bring to Wall Street. Washington remains preoccupied with the healthcare reform effort moving through the Senate. The Federal Reserve is on hold until September. And the second-quarter earnings season will begin in earnest in another week.
Based on market seasonality, July tends to mark the beginning of a period of market volatility that runs through the beginning of October. With stocks overdue for a correction, and the Nasdaq 100 moving below is 50-day moving average in a big way for the first time since late last year, the stage seems to be set for an increase in trading volume and price unevenness.
No wonder then that, historically, the best-performing areas of the market in July — smack dab in middle of the summertime doldrums — tend to be “defensive” areas like consumer staples, utilities and healthcare stocks.
And actual defense stocks — the ones that make missiles and ships and guns — look ready to roll higher here as well amid simmering tensions with North Korea. Read on for seven stocks to watch for long-side plays.