S&P 500 poised for best quarter this year

Time for a little bubbly?

The S&P 500 is poised for its best quarter in 2016 thanks in part to a rally in shares of technology companies.

Despite muted trading for much of July and August, which saw the S&P 500 finish within 1 per cent of where it began the day for 43 straight trading days — the benchmark index is up 2.3 per cent this quarter and up for a fourth straight quarter.

And that compares with a 1.9 per cent gain in the second quarter and a 0.8 per cent rise in the first three months of the year.

“I think the reason the [S&P 500] performed best in Q3 is simply a matter of timing,” Randy Fredrick at Schwab Center for Financial Research, said. “Q1 was not a good quarter due to the historical price drop in crude oil prices, Q2 was spoiled by the Brexit surprise just 2 weeks before the end of the quarter, but Q3 started in the early days of the Brexit rebound.”

The S&P 500 finished little changed in June — the month the UK voted to leave the European Union — but rose 3.6 per cent the following month as concerns around the vote abated and amid better-than-expected data on the US economy.

And a breakdown showed that technology easily outperformed the broader index, climbing nearly 11 per cent so far this quarter, with Seagate Technology leading the gains in the sector, rising 52 per cent over the same period. The so-called FANG stocks — Facebook, Amazon,Netflix and Google — have also outperformed the benchmark index in the current quarter.

With the current quarter’s gains the S&P 500 is up 5 per cent so far this year.