Despite rising interest rates, elevated inflation, a banking crisis and fears over a potential economic recession, the SPDR S&P 500 ETF Trust SPY is up 7.9% year-to-date. The stock market appears to be climbing a wall of worry, and Carson Group’s Ryan Detrick recently compiled a list of 10 reasons the S&P 500 could keep grinding higher in 2023.
“Yes, things aren’t perfect, but there really are some positives out there,” Detrick tweeted.
Here are his 10 reasons to be bullish on stocks:
- When the S&P 500 is higher in the month of January, it has historically finished the year higher 86% of the time. Detrick said the performance has been even better during years in which the January rally is at least 5%.
- When the S&P 500 has rallied more than 5% in January following a down year, it has averaged nearly a 30% return in the following year.
- When volume demand is greater than volume supply, the S&P 500 has averaged a nearly 19% gain over the following 12 months.
- When the S&P 500 stays above its December lows throughout the entire first quarter, it trades higher throughout the remainder of the year 92% of the time for an average gain of 11.1%.
- When the S&P 500 has generated at least 5% gains in back-to-back quarters, it traded higher over the next 12 months 87% of the time for an average gain of 13.5%.
- When the S&P 500 kicks off a calendar year with five consecutive days of gains, it finished the year higher 87% of the time for an average gain of 15.4%.
- The S&P 500 has averaged a 32.3% gain in the year following a midterm year low, which occurred on Oct. 12 last year.
- The Philadelphia Phillies lost the 2022 World Series and the Philadelphia Eagles lost Super Bowl LVII. Historically, the stock market has performed very poorly following a pro sports championship in Philly.
- The Federal Reserve is likely approaching its final interest rate hike of the cycle, and the S&P 500 has historically averaged a 12% gain in the year following the end of a tightening cycle.
- When the S&P 500 has gained at least 7% in the first quarter of a calendar year, it has never finished the year lower and has averaged a full-year gain of 23.1%.
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Benzinga’s Take: While investors can look to the past to identify trends and trading patterns, past performance is never a guarantee of future results. Although it may be worth noting the Phillies are off to a 6-10 start to the 2023 MLB season.
Photo via Pixabay.