Excitement among market watchers is growing in the US corporate sector, seeing how Wall Street is currently manifesting signs of a trend that has only occurred four times since the 1920s – and it’s a trend that could mean double-digit gains for companies in 2024.
As of press time, the S&P 500 has been on a roll for five consecutive months, though these were followed by losses for three straight months. This unusual pattern of gains and losses in this particular index could be a harbinger of a double-digit increase next year. It’s an event that many investors are looking forward to as it is a time of strong stock gains that tend to follow such events.
What Came Before
The S&P’s five-month gain streak ran from March to July of this year, then was followed by three months’ worth of sell-offs that ended just last month.
In the four previous times that this occurred, the index gained a 12% median in the six months that followed. Over the course of twelve months, it gained a median of 21%.
According to experts on the index’s history, the S&P’s most recent win-lose streak is most similar to the trends seen back in 1975 and again in 2016. In the first instance, stocks were up by 22.5% in the six months following the streak; in the latter, these were up by 12.1%. Analysts have also pointed out that the most recent stock sell-off has been going on for the longest period on record: 39 market days at last count.
While stocks were up at the beginning of this month, they were on shaky ground for much of the past three months as investors tried to make adjustments based on predictions that interest rates would stay high. As a result, bond yields are up, and 10-year US Treasury bonds hit their highest in sixteen years last month, driving the S&P 500 into the correction zone as October drew to a close.
