This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Market Preview: Skipping the Summer Swoon

NEW YORK ( TheStreet) -- One thing that 2012 has going for it that 2011 and 2010 didn't is that the American people are going to the polls to vote on who calls the White House home for the next four years.

"On average, the April-May period for the Presidential election year is the weakest two-month period for the year -- down nearly 2.0%," Bank of America Merrill Lynch said Tuesday. "This is followed by the strongest three-month period in June-August -- up 5.0% -- that often moves the market to a new recovery in autumn."

By that logic, the firm thinks the market could avoid a summer swoon so it may make sense to pursue a "buy the dips" strategy this month. It's sticking to the view that bigger is going to be better later in the year.

"We maintain that leadership is emerging in the mega caps," B of A said. "We particularly favor those stocks with strong technicals that are also under-owned by institutional investors ... Stocks that are favored are: Caterpillar (CAT), Chevron (CVX), Intel (INTC), Eli Lilly (LLY), Procter & Gamble (PG), Kimberly-Clark (KMB), Coca-Cola (KO), United Parcel Service (UPS), DuPont (DD), and Verizon (VZ)."

Tuesday's upbeat session aside, investors are still wary of what happens next for stocks after being burned the past two years. The economic data has shown some cracks of late with first-quarter GDP coming in a bit short, and a disappointing April jobs report on Friday would be difficult to explain away as a blip after the softness seen in March.

There's also the continuing question of whether the Federal Reserve is going to placate Wall Street's appetite for more quantitative easing when Operation Twist runs out at the end of June. One potential warning sign for the bulls though may be that the financials are no longer showing the same leadership that they did in the beginning of the year. B of A said Tuesday it believes the group is still stuck in a secular bear market that began in 2008 and that "the sector likely has five to seven more years of being range-bound." Yikes.

As for Wednesday's scheduled news, it's another big earnings day with credit card giants MasterCard (MA - Get Report) and Visa (V - Get Report) -- both market leaders this year, up more than 20% each -- opening their books.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
MA $92.03 0.35%
OPEN $102.95 -0.02%
WFM $56.10 1.40%
V $274.65 0.33%
AAPL $126.88 -1.30%

Markets

DOW 18,127.15 +30.25 0.17%
S&P 500 2,100.24 +1.71 0.08%
NASDAQ 4,979.5460 +12.4050 0.25%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs