The market is off to a great start heading into 2024. History tells us that this entire year will end with a bang, not a whimper.
Although,
S&P500
Performance was weak during the holiday-shortened week, rising just 0.4%. He is one of the company’s record first quarter results. The index’s closing price record has been broken 22 times since the beginning of the year, the most in the first quarter since 1998.
The S&P 500 index rose 10.2% in the first three months of 2024. This is his fourth time in the 2000s to rise more than 8% in the first three months of this year, following in 2012, 2013, and 2019. when they rose by 12%, 10%, and 13.1%, respectively.
It hasn’t done so since before the dot-com bubble burst in 1998, according to Dow Jones Market Data. Overall, it is only the 17th time since 1950 that the index has risen more than 8% in the first quarter.
The S&P 500’s first-quarter rally comes on the heels of a 24% rise last year, leading some skeptics to believe the market is getting ahead of itself. The fact that enthusiasm for artificial intelligence is still at the forefront has done little to allay some people’s fears that a new tech bubble could burst. Other cautious voices point out that FOMO, or fear of missing out, is the real factor drawing more money into the market.
Advertisement – SCROLL TO CONTINUE
Still, there are strong arguments in favor of continuing benefits.Nvidia
‘s
Recent results show that AI optimism is more than just hype. And unlike 2023, he says, technology isn’t the only thing driving the market this year. The S&P 500 Healthcare and Consumer Staples indexes posted their best quarters since the fourth quarter of 2022. In March alone, financial stocks and consumer staples indexes were on an upward trajectory for the fifth consecutive month, hitting their highest value since 2018.
There are other things to cheer up the bulls. There have been 16 times since 1950 to 2023 when the S&P 500 index has recorded an increase of 8% or more in the first quarter, but Black Monday was the only time stocks fell during the rest of the year. He only did it once, in 1987, the year of his downturn. In his other 15 years, the index rose an average of 9.7% in his subsequent three quarters. In other words, going back nearly three-quarters of a century, if the S&P 500 rose more than 8% in the first quarter, there was a nearly 94% chance that it would rise further.
Overall, this bodes well for continued momentum in 2024. However, there’s a good chance that profits for the rest of the year won’t match first-quarter profits.
Advertisement – SCROLL TO CONTINUE
In 10 of the 15 years listed above (excluding 1987), the first quarter increase exceeded the second to fourth quarter increase. This was the case in 2012, where the 12% increase in the first quarter outpaced the 1.3% increase in the remaining quarters. Year.
Nevertheless, in 2013 and 2019, the S&P 500 rose more strongly in the last three quarters than in the first.
What’s more, a year that starts off strong like 2024 is unlikely to disappoint investors, barring a black swan event.
Advertisement – SCROLL TO CONTINUE
We do not expect this quarter to be disruptive in this regard.
Write destination Teresa Rivas teresa.rivas@barrons.com
