Michael Jamison, Portfolio Manager
June 10, 2020
On Wall Street an old adage goes “You Can’t Fight the Fed.” The combined support of the Federal Reserve Bank and the legislation passed to fund the U.S. stimulus package has led a stock market rally beyond many people’s expectations. The following Bloomberg data shows the S&P 500’s most recent peak 50 day increase versus several other historical highs dating back to 1975.
As you can see, the S&P 500 posted a 40% gain, the biggest-ever gain since it was restructured to include 500 companies in 1957. LPL senior market strategist, Ryan Detrick, believes “this rally offers a reason to think stock prices may be even higher by this time next year.” According Bloomberg, Peak 50-day gains of more than 20% occurred only seven other times between 1975 and 2009. Each time, the S&P 500 moved higher in the following 12 months. Good reason for us to remain optimistic of what lies ahead.