![\"Will](\"\/blog\/wp-content\/uploads\/2020\/05\/MW-IB221_MACcla_20200302053700_ZG-1200x675.jpg\")
<\/p>\nSince 1928, reviewing the past 25 bear markets, there has been a lower price put in by the S&P 500 index 60% of the time<\/p>\n
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Published: May 2, 2020 at 6:10 p.m. ET, By Mark DeCambre<\/p>\n
Will the U.S. stock market retest bear-market lows put in on March 23?<\/p>\n
That is perhaps the most prevalent question on Wall Street. And while there\u2019s no way of knowing the answer for sure, if history is any guide, when the stock-market slips into a bear market, typically defined by a decline of at least 20% from a recent peak, it tends to return to return to that low more often than not, according to data from Bespoke Investment Group.<\/p>\n
So far, the Dow Jones Industrial Average DJIA, the S&P 500 SPX and the Nasdaq Composite COMP indexes have struggled to start off trade in May<\/a>, after an uptrend in April<\/a> that produced the best monthly gains in years.<\/p>\n The Dow is up about 28% from its March 23 low at 18.591.93, the S&P 500 is up roughly 27% from its low at 2,237.40 and the Nasdaq has climbed by 25% from its bear-market nadir at 6,850.67, according to FactSet data.<\/p>\n MarketWatch has written about the likelihood of a so-called retest of those levels, which may result in the indexes returning to or exceeding March\u2019s drop, with Mark Hulbert suggesting that small-capitalization stocks<\/a> are sending a bullish signal.<\/p>\n JPMorgan Chase & Co., analysts warned<\/a> last month that investors should get ready for a \u201cvicious spiral\u201d that is twice as severe as the 2008 financial crisis, while MarketWatch\u2019s Hulbert wrote a separate piece pointing to August<\/a> as a possible last stand for the bears.<\/p>\n Read: Are investors driven by FOMO, or is a retest of the lows coming? Here\u2019s what Wall Street strategists are saying about the stock-market outlook<\/a><\/p>\n Check out: The next stock-market bounce will give way to \u2018drop\u2019 and retest of the low, says Wall Street analyst<\/a><\/p>\n Bespoke\u2019s data, however, says that since 1928, reviewing the past 25 bear markets, there has been a lower price put in by the S&P 60% of the time.<\/p>\n \u201cIn the first bear market of the Great Depression, the S&P fell 44.57% over 58 days and then rallied 20%+ to enter a new bull market,\u201d the analysts at Bespoke wrote in a Friday report. \u201cUnfortunately, the S&P went on to make a lower low 338 days later, and then kept going lower and lower for years,\u201d the report continued.<\/p>\n Making a finer point, however, Bespoke notes that of the 11 bear markets from 1928 through 1940, 9 of them saw the S&P 500 make a lower low, but since 1940 most bear markets have tended not to see retest (see attached table):<\/p>\n It is worth noting that the Federal Reserve, and central banks elsewhere, have delivered trillions of dollars in stimulus measures to help ease the economic and market impact of the COVID-19 pandemic that helped produce this public-health and financial crisis.<\/p>\n Many investors believe that the monetary and fiscal stimulus could be a sufficient cocktail to help ward off a revisit to the depths of March, but economic reports that point at stark deterioration in economic activity compared with a few months ago may be enough to shake the nerve of even the staunchest bulls.<\/p>\n Indeed, the Institute for Supply Management said its manufacturing index fell to 41.5% last month from 49.1% in March. This is the lowest since April 2009 and the reading showed the biggest monthly drop<\/a> for new orders since 1951.<\/p>\n Investors will be closely watching for nonfarm-payrolls report from the Labor Department for April next week, after the weekly jobless claims showed an increase in total claims at a record around 30 million<\/a>. <\/p>\n![\"How](\"\/blog\/wp-content\/uploads\/2020\/05\/MW-IF681_retest_20200501143802_NS.jpg\")
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