If stocks end October with returns similar to those seen since April, historical data suggests more upside is on the way. Nerad + Deppe Wealth Management’s Steve Deppe also found 12 examples dating back to 1950, when the S&P 500’s six-month trailing return through October was above 10%. The S&P 500’s 6-month trailing return is currently over 15%. In every similar case, going all the way back to Harry Truman’s presidency, the December composite ended up being higher than the October index. On average, across all other scenarios, the S&P 500 rose 7.4% in November and December. In other words, the benchmark index has always built on gains in the last two months of the year. If past is just prologue, the market still has room to rise further even as stocks trade near all-time highs and after an unusually strong first three quarters of the year. But it also depends on where markets go for the rest of October, which can be difficult to predict as the presidential election enters its home stretch and the next Fed policy meeting approaches. The S&P 500 is currently up nearly 2% from last quarter. “In 2024, it will be easy to take the money and run,” Depay told CNBC Pro from his office in La Jolla, California. “We’ve had an incredible two-year run; the market is overvalued; we have an election coming up; tensions are rising in the Middle East; etc.” “There are good reasons for someone to want to hit the eject button,” he added . But, “when you see data like this, it helps support the idea that it’s more appropriate to be disciplined about your investment strategy than to act based on any emotional bias.” Although Depp said investors should never Views such data as a “guarantee” of future returns, but noted it can provide “comfort” in sticking to an investment plan. .SPX YTD Mountain S&P 500, YTD Deppe currently expects the S&P 500 to top 6,000 by 2024. Even a close at that level would mean the S&P 500 still has room for about 3% upside from Thursday’s closing price. He said the market should even be able to continue to rebound into the first half of 2025, but could “run out of steam” next summer. “Right now, I think our environment is basically blond from a price action perspective,” he said. This “leads me to believe that the underlying state may be better than we all thought.”
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