If the past is a guide, the S&P 500 may continue to rise in 2024 after posting strong returns in January, according to analysis from Bespoke Investment Group.
A team of stock market analysts at Bespoke found that when the S&P 500 SPX is trading in positive territory this month so far, the index continues to rise during the last four trading days of January.
When the index ends January in the green, the chances of it continuing to advance for the rest of the year improve dramatically.
Since 1953, the year the current five-day trading week first arrived in the US stock market, when the S&P 500 index rose 2% or more in January, its average performance for the rest of the year has been a gain of 13.5%. A detailed analysis said, in a report shared with MarketWatch on Friday.
Moreover, the index recorded positive returns for the year balance of 84%. Finally, the index ended January higher by 2% or more 31 times between 1953 and 2023, the Bespoke team showed.
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A new year marks a fresh start for markets, which has made the first few weeks of each year subject to scrutiny by investors looking to read the tea leaves over the next 11 months.
is reading: Stocks lost money during the first 5 trading days of January. What does this mean for 2024?
To be sure, the index's outlook for the rest of the year is usually much less rosy when it ends January with weaker gains, or in the red. When the S&P 500 ended January with gains of less than 2%, its average performance for the rest of the year fell to 6.4%, with positive returns achieved only 68% of the time.
The S&P 500 has risen 2.5% since the beginning of January, according to FactSet data. The index is on track to close lower on Friday, falling 0.1% to 4,887 heading into the final 90 minutes of trading for the week.
