Odds Favor Stocks Rally In 2014
The S&P 500 ($SPX) soared nearly 30% in 2013! Great Year- but what does that mean for 2014? The data is mixed for the market but bodes very well for the economy (GDP).
- Since 1950, there have been 17 other instances when the S&P 500 was up over 20% in a year
- The S&P 500 finished positive the following year 14 times, or 82% of the time
What About The Economy?
People love to talk about a correlation between the US stock market and the economy. Most data shows that there simply is not a clear correlation between the S&P 500 and GDP. Well, we did some digging and thanks to our friends at CNBC analytics, we found one. Every time the S&P 500 vaulted more than 20% in one year (table left) GDP rose the following year.
- The GDP annual compound rate was positive 100 percent of the time the following year, up on average 4.48 percent
Source: CNBC Analytics More stats on the S&P 500 performance following a strong year: http://www.cnbc.com/id/