Making Sense: November Outlook
Brent Ciliano
CFA | SVP, Chief Investment Officer
Looking to year-end, will market performance sustain? The stats suggest it might.
I've been getting a lot of questions over the last 2 weeks around market performance into year-end, especially given both September's 5% sell-off in the S&P 500 and October's corresponding recovery.
The table below (data from Ned Davis Research highlights) shows that post 1925—when the S&P 500 had risen 20% or greater year-to-date through October— the subsequent additional gains though year-end were a median +6% and had a positive outcome 88% of the time. Out of the 16 previous occurrences to 2021, the only 2 negative years saw a very modest -0.2% and -2% drawdown in the remaining 2 months. You'd have to go all the way back to 1943 to see the last time that happened.
Year |
% Gain YTD to 10/31 |
% Gain 10/31 to 12/31 |
|---|---|---|
1927 |
20.3 |
8.8 |
1928 |
22.8 |
12.3 |
1933 |
30 |
12.7 |
1935 |
31.2 |
7.8 |
1936 |
28.2 |
-0.2 |
1938 |
24.8 |
0.3 |
1943 |
22 |
-2.1 |
1945 |
25.4 |
4.3 |
1954 |
27.7 |
13.6 |
1958 |
28.4 |
7.6 |
1975 |
29.9 |
1.3 |
1989 |
22.6 |
3.8 |
1995 |
26.6 |
5.9 |
1997 |
23.5 |
6.1 |
2012 |
23.2 |
5.2 |
2019 |
21.2 |
6.4 |
If history were to repeat, we would more than eclipse my 2021 year-end price target for the S&P 500 of 4,700 that Phil Neuhart and I covered on last month's Making Sense webinar. While we all know that history certainly doesn’t always repeat, at least the data has been encouraging.
Metrics |
% Gain 10/31 to 12/31 |
|---|---|
Median |
6.0 |
% Positive |
87.5 |
All Years Median |
3.4 |
All Years % Positive |
71.5 |
