Everywhere you go these days, people are talking about the flatness of the US stock market. Urban Carmel (The Fat Pitch) says the stalemate should break soon enough, in one direction or the other. I weighed in on the flat market meme myself the other day at Fortune.
Bank of America Merrill Lynch’s Stephen Suttmeier takes a look at what happens when the S&P 500 fails to perform above its long-term average through the first half of the year…
A lackluster 2H tends to follow a lackluster 1H
The average S&P 500 return for the first half of the year (1H) going back to 1928 is 3.65%. The 1H 2015 return of 0.20% is well below average and a lackluster second half of the year (2H) tends to follow a sub-par 1H. The average 2H return is 3.90% with the S&P 500 up 66.7% of the time, but when 1H is below average, 2H is up 57.1% of the time with an average return of only 1.42%. When the 1H return is above average, the average 2H return is 6.22% with the market up 75.6% of the time.
Chart Talk: A lackluster 2H tends to follow a lackluster 1H Bank of America Merrill Lynch – August 4th, 2015