S&P 500 Returns >20% Through Q3: What’s Next?

Tiger_James Ooi
10-01

The S&P 500 $SPDR S&P 500 ETF Trust(SPY)$ $Vanguard S&P 500 ETF(VOO)$ $iShares Core S&P 500 ETF(IVV)$ has gained 22% through the first three quarters of this year.

Historically, there have been 24 instances where the index posted gains of 20% or more by the end of Q3:

  • 87.5% of the time, the S&P 500 delivered positive returns in Q4.

  • The average Q4 return was 4.1%.

Since 1943, in years with gains of over 20% through Q3, the S&P 500 typically finds its bottom around October 27, with an average drawdown of -2.12%, followed by a rally through December.

 

Source: Bloomberg, Tiger Brokers, 1 Oct 2024

Conclusion:

I remain skeptical of an October rally and expect a potential correction lasting until the end of Oct for U.S. stocks.

Modified in.10-02
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