A strong first 100 days for the S&P 500 set the stage for the rest of the bull year, analysts at Bank of America Securities said in a note Friday.
According to the bank's research, when the S&P 500 rises 10%+ in the first 100 days, the rest of the year is strong: up 76% of the time for an average return of 7.1% (9.3% median).
“Success breeds success. May 23 was the 100th trading day of 2024, and the S&P 500 (SPX) is up 10.4% year-to-date,” the bank announced.
“This equates to an SPX of 5640 to 5750 at the end of 2024,” the company adds. “The rest-of-year average and average returns for all years going back to 1928 of 5.0% and 7.3% respectively for the SPX indicate 5530 to 5650 through the end of the year.”
Bank of America notes that a rise in the S&P 500 over the first 100 days is also bullish for the rest of the election year.
“When the SPX trades higher during the first 100 days of a presidential election year, the rest of the year tends to be strong with the index up 93% with an average return of 10.1% (SPX 5800) and an average return of 8.9%. (SPX 5730 ),” they explain. “Rest year returns for all election years show the SPX rising 88% of the time on average and average returns of 8.8% (SPX 5730) and 8.5% (SPX 5700) respectively.”
The index tends to rise in the summer and presidential election years can see large summer rallies.
“June-August is the second strongest 3-month period of the year for all years dating back to 1928, with the SPX up 65% of the time with an average return of 3.2% (SPX 5430 from 5/23 close).” Bank of America says.
“In presidential election years, the SPX is up 75% of the time from June to August with an average return of 7.3% (SPX 5650 from 5/23 close).”
