Stovall在周一给客户的报告中指出：“自1947年以来，达到两周年的11次牛市的平均回报率仅为2%。此外，所有牛市在接下来的12个月内都经历了至少5%的下跌，其中五次跌幅超过10%，但低于20%，还有三次最终演变为新的熊市。”USA stock market started the third year of the bull market on a good note, with the S&P 500 index hitting a new historical record on Monday.
USA stock market started the third year of the bull market on a good note, $S&P 500 Index (.SPX.US)$ hitting a new historical record on Monday. However, history indicates that investors need to be prepared for potential pullbacks in the next 12 months.
According to the analysis of Sam Stovall, chief investment strategist of CFRA Research, since 1947, all 11 bull markets that have reached the two-year anniversary have experienced at least one 5% or more decline in the next 12 months, some even entering a new bear market.
Stovall pointed out in a report to clients on Monday: "Since 1947, the average return of the 11 bull markets that reached the two-year mark is only 2%. In addition, all bull markets experienced at least a 5% decline in the next 12 months, with five declines exceeding 10% but less than 20%, and three times eventually evolving into new bear markets."
Since the bear market low point of the S&P 500 index at 3577.03 on October 12, 2022, it has risen by nearly 64%. According to FactSet data, the index rose by 0.87% on Monday, closing at 5859.85 points.
The following data shows that in the first year of the current bull market, the S&P 500 index rose by 22%, which is the third lowest since 1947. However, the index rose by 34% in the second year, the largest among all second-year increases in bull markets, while the historical median was only 11.5%.
Stovall believes that as the bull market enters its third year, the USA stock market, especially large cap stocks, are concerned about their high valuations.
Currently, the p/e ratio of the S&P 500 index is 25 times, the highest valuation level in the second year of the bull market since World War II, 48% higher than the median p/e ratio in the second year of all bull markets since 1947.
Stovall pointed out: "The p/e ratio typically shrinks in the third year of a bull market, as earnings per share growth tends to accelerate, confirming the optimism implied by the rapid price increase in the early stages of the bull market."
However, John Butters, a senior earnings analyst at FactSet Research, pointed out that Wall Street analysts expect eps growth rates to be 14.2%, 13.9%, and 13.1% in the fourth quarter of 2024 and the first and second quarters of 2025, respectively.
Butters also mentioned that earnings are expected to grow by about 15% in the fiscal year 2025, with a growth rate of around 10% in 2024.
As investors focus on a new batch of corporate earnings reports, the US stock market closed higher on Monday. According to FactSet data, the Dow Jones Industrial Average rose more than 200 points, up 0.5%, while the Nasdaq Composite Index rose 0.9%.
Editor/rice
