Just How Strong Is 2024? And Why the Summer Rally Isn’t Over Yet

“However beautiful the strategy, you should occasionally look at the results.” – Winston Churchill

The amazing bull market continues and 2024 is turning into one of the better starts to a year ever. Yes, there have been some much better years, but considering the S&P 500 gained 25% last year, the approximately 15% gain this year is really impressive.

One thing that intrigues me is election years usually aren’t that strong early and tend to do better late. In fact, only 1976 among election year was stronger at this point in the year, up 15.6% at the midway point. What happened next? Stocks added another 3% the final six months.

Here’s one way to show how this year isn’t your average election year.

But let’s also be aware that for election years with a new president, we are right in the middle of what tends to be a good part of the year. From mid-May to late September stocks do pretty darn well. Yes, we’ve had a heck of a run, but this could be a clue that the summer rally isn’t over yet.

Now let’s be clear, stocks have been on a super strong rally lately. After gaining nearly 5% in May, stocks are up close to 4% in June so far. 1997 was the most recent year that gained more than 4% in both of those usually tepid months and stocks gained another 10% the rest of the year back then. Before we assume stocks will gain 4% in June, let’s be aware the month isn’t over yet and historically the latter part of June tends to be weak. After the run stocks have seen lately, some type of well-deserved break at some point before the end of the month would be perfectly normal.

I won’t give it all away just yet, but July has been quite strong lately, a topic we will share more on in an upcoming blog.

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We will leave on this note. After 118 trading days there have been 31 new all-time highs this year, putting 2024 on pace for more than 66 new all-time highs (ATH), which would be one of the most ever. Looking at other years to see at least 30 new ATHs, the full year was higher every time (20 out of 20) and up 19.6% on average.

For more of our latest thoughts on the rally, the Fed, inflation, and the biggest mistake the Fed could make, be sure to listen to (or watch below) our latest Facts vs Feelings podcast!

 

For more content by Ryan Detrick, Chief Market Strategist click here.

 

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Midyear Outlook 2024: Eyes on the Prize

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