斯托沃在周一的一份客户说明中说：“自1947年以来，11个牛市在迎接两周岁生日后的平均回报率仅为In the 11 historical experiences, without exception, there has been at least one decline of 5% or more, some of which have even evolved into a new bear market.
On Monday, the S&P 500 index hit a new record, kicking off the third year of the bull market for the US stock market, but historical experience suggests that investors need to prepare for potential setbacks in the next 12 months.
CFRA Research's Chief Investment Strategist Sam Stovall stated that since 1947, all 11 bull markets that have celebrated their second birthday have experienced at least one 5% or larger decline in the following 12 months, with some even evolving into new bear markets.
Stovall said in a client note on Monday, 'Since 1947, the average return of the 11 bull markets after celebrating their second birthday is only 2%. More importantly, in the next 12 months, they all experienced a 5% decline, with 5 experiencing drops of over 10% but below 20%, and 3 succumbing to new bear markets.'
Since hitting a bear market closing low of 3577.03 on October 12, 2022, the S&P 500 index has surged by nearly 64%. According to FactSet data, the index soared 0.8% on Monday, closing at 5859.85.
The table below shows that in the first year of the current bull market, the S&P 500 index rose by 22%, the third lowest since 1947. However, according to CFRA Research data, the index saw the highest increase in the second year of the bull market, reaching 34%, with a median of 11.5%.
Stovall believes that as the bull market enters its third year, the current high valuation of the usa stock market, especially large caps, is "worrisome".
The tracking PE ratio of the s&p 500 index is 25, the highest valuation in the second year of a bull market since World War II. According to CFRA Research's data, this level is 48% higher than the median PE ratio of all bull markets' second years since 1947.
Stovall pointed out: "The PE ratio multiples usually contract in the third year of a bull market, as EPS tends to accelerate, confirming the optimistic sentiment implied by the significant early rise in prices in the bull market."
John Butters, Senior Earnings Analyst at FactSet Research, stated that Wall Street analysts expect year-over-year earnings growth rates of 14.2%, 13.9%, and 13.1% for the fourth quarter of 2024, the first quarter of 2025, and the second quarter of 2025, respectively.
In a statement last Friday, Butters projected earnings growth of around 15% for the fiscal year 2025, while the expected growth rate for the fiscal year 2024 is around 10%.
The usa stock market closed higher on Monday, with investors shifting their focus to the next batch of corporate earnings reports.
