{"id":4277,"date":"2022-06-30T05:07:22","date_gmt":"2022-06-30T05:07:22","guid":{"rendered":"https:\/\/www.maxlee.info\/blog\/?p=4277"},"modified":"2022-06-30T05:11:28","modified_gmt":"2022-06-30T05:11:28","slug":"whats-next-for-the-stock-market-after-the-worst-1st-half-since-1970","status":"publish","type":"post","link":"https:\/\/www.maxlee.info\/blog\/invest\/whats-next-for-the-stock-market-after-the-worst-1st-half-since-1970\/","title":{"rendered":"What\u2019s next for the stock market after the worst 1st half since 1970?"},"content":{"rendered":"

Nasdaq set for worst first-half on record<\/strong><\/p>\n

\"EMMANUEL
EMMANUEL DUNAND\/AGENCE FRANCE-PRESSE\/GETTY IMAGES<\/figcaption><\/figure>\n

A bear market that began on the first trading day of 2022 has the S&P 500 on track for its worst first half in 52 years. Investors looking ahead to the end of the year might have some reason for hope, though history is only a rough guide.<\/p>\n

The S&P 500 SPX<\/strong> was down 19.9%<\/strong> year-to-date through Wednesday\u2019s close, which would be its worst first half since 1970, according to Dow Jones Market Data. <\/p>\n

The large-cap benchmark is down 20.4% from its record finish on Jan. 3. The index earlier this month first ended more than 20% below that early January record, confirming that the pandemic bull market \u2014 as widely defined \u2014 had ended on Jan. 3, marking the start of a bear.<\/p>\n

The S&P 500 has bounced around 4% off its 2022 low close of 3,666.77 set on June 16.<\/p>\n

Data compiled by Dow Jones Market Data shows that the S&P 500 has bounced back after past first-half falls of 15% or more. The sample size, however, is small, with only five instances going back to 1932 (see table below).<\/p>\n

\"S&P
S&P 500 second-half performance after a first-half fall of 15% or more DOW JONES MARKET DATA<\/figcaption><\/figure>\n

The S&P 500 did rise in each of those instances, with an average rise of 23.66% and a median rise of 15.25%.<\/p>\n

Investors, however, may also want to pay attention to metrics around bear markets, particularly with the will-it-or-won\u2019t-it speculation around whether the Federal Reserve\u2019s aggressive tightening agenda will sink the economy into recession.<\/p>\n

Indeed, an analysis by Wells Fargo Investment Institute found that recessions accompanied by a recession, on average, lasted 20 months and produced a negative 37.8% return. <\/p>\n

Bear markets outside a recession lasted 6 months on average \u2014 nearly the length of the current episode \u2014 and saw an average return of -28.9%. Taken together, the average bear market lasted an average of 16 month and produced a -35.1% return<\/strong>.<\/p>\n

Other major indexes are also set to log historic first-half declines. <\/p>\n

The Dow Jones Industrial Average DJIA<\/strong> was down 14.6%<\/strong> in the year to date through Wednesday, which would be its biggest first-half fall since 2008.<\/p>\n

As the table below shows, the second-half performance for the blue-chip gauge after first-half declines of 10% or more are variable. The most recent incident, in 2008 during the worst of the financial crisis, saw the Dow drop another 22.68% in the second half of the year.<\/p>\n

\"DJIA
DJIA second-half performance after 10% fall in first half DOW JONES MARKET DATA<\/figcaption><\/figure>\n

In the 15 instances, the Dow rallied in the second half two-thirds of the time, producing an average second-half rise of 4.45% and a median gain just shy of 7%.<\/p>\n

The tech-heavy Nasdaq Composite COMP<\/strong> was down 28.6%<\/strong> year-to-date through Tuesday\u2019s finish, but there was little to go on when Dow Jones Market Data looked back at first-half drops of at least 20% for the gauge.<\/p>\n

There were only two instances \u2014 2002 and 1973 \u2014 and both saw the Nasdaq keep sliding over the remainder of the year, falling around 8.7% over the second half in both instances.<\/p>\n

Source: marketwatch.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Nasdaq set for worst first-half on record A bear market that began on the first trading day of 2022 has the S&P 500 on track for its worst first half in 52 years. Investors looking ahead to the end of the year might have some reason for hope, though history is only a rough guide. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[],"class_list":["post-4277","post","type-post","status-publish","format-standard","hentry","category-invest"],"_links":{"self":[{"href":"https:\/\/www.maxlee.info\/blog\/wp-json\/wp\/v2\/posts\/4277","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.maxlee.info\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.maxlee.info\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.maxlee.info\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.maxlee.info\/blog\/wp-json\/wp\/v2\/comments?post=4277"}],"version-history":[{"count":0,"href":"https:\/\/www.maxlee.info\/blog\/wp-json\/wp\/v2\/posts\/4277\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.maxlee.info\/blog\/wp-json\/wp\/v2\/media?parent=4277"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.maxlee.info\/blog\/wp-json\/wp\/v2\/categories?post=4277"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.maxlee.info\/blog\/wp-json\/wp\/v2\/tags?post=4277"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}