Saturday , 19 September 2020

Historical Performance of S&P 500 In the Weeks Ahead Favors the Bulls

After the S&P 500 posted its largest first quarter return since 1998 many market participants were skeptical the rally could continue. Now that the index is within 2% of all-time highs, investors are wary of another stock market crash with February and October 2018 fresh in their minds. Thankfully for bulls, the near record-breaking first quarter may have set the index up for success.


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S&P 500 price chart and returns

Apart from 1Q 2019, there have only been two other first quarters in the last 30 years that have returned higher than 13%…

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S&P 500 price chart


…If bulls intend to keep pace with the average Q2-Q4 growth following years with first-quarter growth above 10%, the index will need to grow another 8.4% before 2019 concludes. Such a pace will be difficult to maintain, especially with heightened recession fears and signs that the index is petering out near prior tops. However, if history is any indication, the weeks following Easter Sunday may serve to reignite the S&P 500’s rally.

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S&P 500 price chart

Return calculated from Holy Thursday’s closing price to closing price of following Friday

Since 1989, the S&P 500 has seen a positive return during the week following Easter Sunday in 18 of 30 (60%) instances…

The month following Easter has also offered positive returns for the S&P 500 on average.

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S&P 500 price chart

Return calculated from Holy Thursday’s closing price to the S&P 500’s closing price four Friday’s later

In the four weeks following Holy Thursday’s close, a familiar 60% of instances witnessed growth, including six consecutive years…

…The historical performance of the weeks ahead offers a glimmer of hope for continued equity strength in 2019. While past performance is by no means indicative of future results, a statistical observation of the weeks ahead favors the bull.

Editor’s Note: The above excerpts* from the original article have been edited ([ ]) and abridged (…) for the sake of clarity and brevity. Also note that this complete paragraph must be included in any re-posting to avoid copyright infringement.

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(*The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.)