The G8/G20 Summit Effect on the Markets
Think the G8/G20 Summits in Toronto will impact the market next week? Think again. Looking at the past periods where the G8/G20 summits have occurred and the effect on the S&P 500 has averaged a neutral effect. Below are some stats as it pertains to the S&P 500 index.
- A return of 0.07% was averaged over the course of the G8 summits over the last 20 years. Of the past 20 periods, 11 have generated positive returns. Returns ranged from –1.52% in 2007 to 1.51% in 1993. Maximum performance averaged 0.33% if sold during the first day of the meeting.
- Looking out one week from the G8 event and returns averaged 0.01%, still with 11 of the past 20 periods gaining. Over the past 10 years, however, only 4 of the last 10 periods have been positive.
- Gains 30-days out from the G8 event are slightly better at an average of 0.48%. Returns have been positive in 12 of the last 20 periods.
- This will be the fourth G20 meeting this weekend, therefore history is not substantial enough to draw any conclusions, especially since the first meeting occurred at the peak of the market downturn in November of 2008. Returns over the G20 meetings over the past three periods were as follows: –4.17% in November 2008, 2.87% in April 2009 and –1.55% in September 2009
- Seven days out from the G20 event saw an average loss of 5.35% with the November 2008 loss of 17.43% forming the bulk of that equation. However, 30 days out saw an average gain of 2.16% with the substantial 7-day loss trimmed to a loss of only 3.46%. Mind you other factors were at play over these periods which no doubt had greater clout in moving the markets than the G20 meetings
The results show no significant impacts on the market directly attributable to these meetings. All of the G8 meetings have been held near the beginning of summer, which is generally a volatile period to begin with and seasonality details a neutral profile during average years during these June/July meeting dates.
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