Analysts at Bank of America Securities said in a note Friday that the strong first 100 days of the year set the stage for a bullish remainder of the year.
According to the bank’s research, the rest of the year is strong when the S&P 500 rises more than 10% in the first 100 days: up 76% of the time with an average return of 7.1% (9.3% median) .
“Success breeds success. May 23 marked the 100th trading day of 2024, and the S&P 500 (SPX) is up 10.4% YTD,” the bank said.
“This equates to SPX 5640 to 5750 through the end of 2024,” the company added. “The average and median year-end returns for all years going back to 1928, of 5.0% and 7.3% respectively, point to SPX 5530 to 5650 at year end.”
BofA notes that the S&P 500’s rise in the first 100 days is also bullish for the remainder of an election year.
“When the SPX trades higher during the first 100 days of a presidential election year, the rest of the year is typically strong, up 93% on an average return of 10.1% (SPX 5800) and an average return of 8. 9%. (SPX 5730),” they explain. “The rest year returns for all election years show the SPX rising an average of 88% of the time and a median return of 8.8% (SPX 5730) and 8.5% (SPX 5700), respectively.”
The index typically exhibits a summer rally, and major summer rallies can occur during presidential elections.
“June-August is the second strongest three-month period of the year for all years going back to 1928, with the SPX rising 65% of the time with an average return of 3.2% (SPX 5430 as of the close of May 23)” BofA states.
“During the presidential election, SPX has risen 75% of the time between June and August, with an average return of 7.3% (SPX 5650 as of the May 23 close).”
