According to Bloomberg radio on Monday, Sept. 19, the average analyst estimate for the S&P 500’s closing level by year-end 2022 stands at 4,346.
Based on the S&P 500 close at 3,873 on Friday, Sept. 16, that represents a very healthy rally of 12% by the end of the year.
Prospects for the markets looked particularly poor after last week’s market action, driven in large part by August’s consumer-price-index data and a downbeat outlook from FedEx. According to Barron’s this past weekend, “The Dow Jones Industrial Average fell 4.1% for the week, while the S&P 500 index dropped 4.8% and the Nasdaq Composite plunged 5.5%.”
However, on a more positive note, Barron’s also then cited the following statistics:
Mark Hulbert of MarketWatch is another prominent market observer trying to find a statistical silver lining in the market’s 2022 performance so far.
He notes that a representative 60/40 equity/bond portfolio was down 20.4% through Sept. 15, 2022. A loss of that magnitude, according to Hulbert, would be on track to be the fifth worst in market history for such a portfolio.
But he also notes that in the subsequent five-year period after losses of 20% or more in one year, a balanced portfolio’s returns were very strong.
TABLE 1: 60/40 PORTFOLIO RETURNS AFTER 20% OR MORE DOWN YEAR
Looking at the current chart for the S&P 500 through Sept. 16, Bespoke Investment Group observed,
FIGURE 1: S&P 500 WITH 200-DAY MOVING AVERAGE
Source: Bespoke Investment Group
Charlie Bilello, founder and CEO of Compound Capital Advisors, shared the following historical-data table last week on Twitter. While offering some hope for an S&P 500 rally into year-end, it also points out the likelihood of overall negative returns for the year.
TABLE 2: S&P 500—WORST ANNUAL PERFORMANCE THROUGH 178 TRADING DAYS (1928–2022)
Source: Charlie Bilello, Compound Capital Advisors
New this week: