A Strong First Five Days Could Have Bulls Smiling

So far so good for the S&P 500 Index as it has just logged a 2.8% gain over the first five trading days of 2018 to mark its best five-day start to a year since 2006.

Per Ryan Detrick, Senior Market Strategist, “Like a kid sledding down a hill, sometimes all it takes is a little momentum to get moving. Well, stocks appear to be similar, as when the first five days of a new year are up 2% or more, the full year has been higher 15 out of 15 times!”

Not only has the full-year return for the S&P 500 been positive in every instance when the index gains at least 2% over the first five trading days of the year, but the average gain has been a very impressive 18.6%.

Although we expect the bull market to continue, one key point we want to stress is not to expect another smooth ride like we saw in 2017. Last year was the first year in history that the S&P 500 went all 12 months without a 3% correction; it also had the fewest 1% daily changes since 1965 and the smallest average daily change since 1964.

In short, 2017 was truly historic in terms of tranquility. But what should matter most to investors now is that years that started off with a 2% or greater return after five days have seen an average correction of 11.1% within the year.


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Past performance is no guarantee of future results.

The economic forecasts set forth in the presentation may not develop as predicted.

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The S&P 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

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