Author Topic: The S&P 500 Had Its Worst First Half Since 1970. What Comes Next.  (Read 161 times)

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Offline Ptarmigan

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The S&P 500 Had Its Worst First Half Since 1970. What Comes Next.

The S&P 500SPX –0.88%  has posted its worst first half of a year since Richard Nixon’s presidency, and many investors worry it has yet to hit bottom.

In the first six months of 2022, the widely followed large-cap index has tumbled 20.6% amid expectations of high inflation and a hawkish Federal Reserve, whose rate-hike plans could push the U.S. economy into recession. The last time the S&P 500 fell this much in the first half was in 1970, according to Dow Jones markets data.

Investor sentiment has tumbled along with stock prices, and many market analysts expect the S&P 500 to slide some more. The 12 bear markets since World War II—not including the current one—lasted an average of 10 months from market peak to trough, with an average drop of 34%. If the current bear market were to follow this pattern, it wouldn’t hit bottom until October.

Even so, a rebound, when it comes, could be dramatic. Markets tend to perform the best when investors are the gloomiest.

With its 20.6% loss year to date, the S&P 500 posted its fourth-worst first-half performance on record, only behind 1932, 1962, and 1970, when it lost 45.4%, 23.5%, and 21.0%, respectively.

The first 6 months has been cruel to S&P 500. It is the largest drop since 1970.
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