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A Rough Start for Retail

Notwithstanding a bright spot here and there, 2014 has been a horrible year for retail stocks.  Just two trading days into the second month of the year, the S&P 500 retail group is already down over 9%.  This represents the worst start to a year for the group since 2000, when the group started the year off with an 11% decline through 2/4.

The chart below shows a composite of the historical average performance of the S&P 500 Retail group throughout the year going back to 1990 as well as the last five years.  Below the chart we have also included the average monthly performance of the group.  Although the declines in retail that we have seen so far this year are nowhere near ordinary, as the chart illustrates, the month of January has historically not been one of the best months for the group.  Not including this year, the group has averaged a gain of just 0.2% in January since 1990.  Since 2009, though, the retail group has averaged a decline of 0.6%, which is the fourth worst month of the year for the group.

Looking ahead, February has tended to be a bit better for the retail group as it has averaged a gain of 1.6% since 1990 and a more muted 0.3% since 2009.  The month of March is where things have historically really turned around for the group though.  Going back to 1990, the group has averaged a gain of 3.8% in the month of March, which is better than any other month.  Since 2009, the returns have been even better as the S&P 500 Retail group has averaged a gain of 6.2%, which is second behind only April's gain of 7.1%.  While the start to 2014 has been dark for retail, for those still long the group, spring can't come soon enough. 

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