Stock markets seem to be remarkably capable of shaking off any worries since the closing lows of March 9. Though it’s just shy of positive territory and continues to be the laggard year-to-date, the Dow is up 48.75% since its low, while the Nasdaq is up 46.13%. By contrast, the S&P 500 is up just shy of 40% since its March low.
How much further could the rally go? Well, the S&P saw its best annual price increase in 1933, when the index rose 46.59% (after four straight years of price declines). From a year-to-date standpoint, that means there’s a lot of room overhead from the S&P’s current 4% YTD increase. However, starting from 903 on Jan. 1, the S&P would have to hit 1324 by year-end to equal 1933’s annual increase–which coincidentally is almost exactly the amount by which the S&P has risen in the last three months.
Here’s what would have to happen to match 1933’s record: at 939 yesterday, the S&P would have to rise another 41% over the next seven months, which would mean almost a 96% total increase from the March low of 676. By contrast, the S&P has already exceeded the most lame non-negative year for capital appreciation: 1947’s 0.00%.
Filed under: Investments | Tagged: 1933, rally, S&P 500, stock market
