Hopeful signs despite awful start to the month?
The Great Recession (aka the 2008 Global Financial Crisis) peaked in March 2009. Stocks bottomed that month, after a nearly 60% decline from a high in October 2007, putting an end to a brutal bear market.
LPL Financial chief market strategist Ryan Detrick looked back at how the S&P 500 fared in the 17 times since 1957 when the market fell in January and February and found that stocks usually rebound. The S&P 500 rose by an average of 1.1% in March of those years and wound up with a nearly 4% gain over the final 10 months following the drops in January and February.
“Seeing the first two months of a new year in the red isn’t a great feeling, but the good news is lately it hasn’t been a major warning sign,” Detrick said in a report.
Soothing comments from Fed chair Jerome Powell about the economy after the Fed’s rate hike Wednesday could also be good news for stocks for the rest of March.
“There has been no doubt that it has been a rocky start to the year,” said Angelo Kourkafas, investment strategist with Edward Jones. “Powell struck a positive note about the strength of the economy and the market’s ability to withstand rate hikes.”