Southern Company (The) (SO) Stock Forecasts

Summary

June is not one of the better months for stocks, according to our analysis of market returns since 1980. On average, equity investors in June eke out a 0.2% positive return for the month — better than only the weakest months of February, August, and September. The winning percentage is 61%, higher than only the 3Q summer months. We note that market returns in June have exceeded 5% only three times in the past 37 years: a 5.4% increase in 1999, a 6.9% gain in 2019, and last year’s 6.3%. Clunkers? We have seen a few, including 2008 (-8.6%), 2002 (-7.2%), 2010 (-6.1%), and 1991 (-4.8%). June typically is a quiet month for earnings, as the second quarter draws to a close. But don’t be surprised by fireworks on the economic, interest rate, and inflation fronts. On Friday, the nonfarm payrolls report will be watched to determine the strength of the employment and thus consumer segments of the economy. Our forecast is for a solid 168,000 new jobs, down slightly from 175,000 new jobs last month but still supportive of economic growth. The Federal Reserve meets and is not yet expected to lower the federal funds rate from the current cycle highs, but may signal its intentions for th