Two Years of +20% Gains for the S&P 500: What's Next? │ Michael Hartnett

Michael Hartnett, Chief Investment Strategist at Bank of America, notes that the S&P 500 is on track for a +20% return in two consecutive years. This has occurred only four times in the past 150 years: 1927/28, 1935/36, 1954/55, and 1995/96. 

 

Historical analysis of returns in the following two years reveals two key insights:

1. The S&P 500 is likely to experience another significant double-digit move in 2025.
2. Falling bond yields may serve as the "secret sauce" that helps the S&P 500 avoid the substantial reversals seen in 1929/30, 1937/38, and 1956/57, potentially catalyzing further significant equity gains, similar to what occurred in 1997/98.

Michael Hartnett (BofA), November 22, 2024. 

 

Decennial Cycle: Average annual change in the DJIA (1881-2023).

 

 Ned Davis Research.

See also:

Tom DeMark (November 15, 2024) - US Stock Market Nearing a Top Similar to 1929.