Data analyzed by Bespoke Investment Group shows that the current bear market in equities may need to take another leg lower before rebounding. The S&P 500’s decline over the past six months is ‘tame’ compared to the past six months of previous market downturns, according to Bespoke’s analysis of the previous nine times since 1928 when the S&P fell more 25% from an all-time high. This is bad news for investors hoping that the current bear market has bottomed out, as the general rule is that the last six months of a bear market before a rally is particularly painful. In other words, it’s always darkest before dawn, but the data indicates that it’s not as dark as it used to be. “Examining the comparison of these returns to the current period shows that the magnitude of the declines in the six, three and one months leading up to the recent October 12 low is rather mild,” Bespoke said in a note. tuesday. . The S&P 500 was down 18.7% in the six months to last week’s low, which is the second-best performance of any bear market analyzed. That’s a softer fall than the median drop of 26.3% during those periods – and even further than the declines seen in the six months before the bear markets catalyzed by the 2008 recession and the terrorist attacks in September 11, 2001. “Trying to catch a falling knife” Bespoke advises investors to hold their ground in the face of fluctuations. “When it comes to investing during a bear market, you will often hear the advice that investors should wait on the sidelines until the market shows signs of significant stabilization,” the company said. “You can lose a hand (or your retirement) trying to catch a falling knife, so for most investors buying aggressively into a dip is not advisable as large losses can quickly turn into something much worse. -in’ when faced with a big drop can be considered reckless, going all out until things ‘stabilize’ is probably just as reckless.” However, Bespoke acknowledged that bull investors can see when they hit the true bottom, noting median gains of 15.2%, 19.4% and 30.9% in the first one, three and six months. , respectively, after the historical lows studied. This means the rebound was generally the same size or larger than the previous drop, according to Bespoke. But it becomes more difficult to assess a bottom when the index closes near the bottom, which can confuse investors as to when a bottom has really been reached. The S&P 500 closed within 5% of the true low, a median of 10 times in previous bear markets. If October 12 was the true low, the index would have hovered around that low much more than in the past. In just six months to Oct. 12, the S&P 500 closed 20 trading days below 5%. Other companies shared the sentiment that there is more pain to come. In a note to clients on Monday, Barclays said shares were “not at their lowest yet”. “Positioning remains cautious but investors haven’t capitulated,” said Venu Krishna, head of US equity strategy. “Investors have reduced their risk exposure, and options data such as rising open interest on calls and flat bias suggest the pain trade could be on the upside.” Wolfe Research said in a note Monday that the economic bubble has yet to burst, although the Federal Reserve continues to raise interest rates in an effort to temper inflation. “Unfortunately, while much of the air is out, we see more downside ahead as the Fed now reverses course in the opposite direction” of its previous lax policy, the chief investment strategist said. Chris Seneyk.
European Stocks Mixed After Wall Street Open; Geberit jumps 6% – Yahoo Movies Canada
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