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Heads Up!

January 30, 2018 | Weekly Commentary

Thomas Lee, head of research at Fundstrat Global Advisors, notes that the S&P 500’s rise has gone parabolic. Its 6%-plus gain this month trounces the 2% average monthly advance from September to December 2017 and the 1.2% average monthly gain from January through August 2017. Rather than being worrisome, these accelerations into a new year have historically led to even more upside. Only eight years have played out like this since 1928, and just two—in 1929 and 1946—were followed by big drops in the market. The other six times—in 1936, 1951, 1989, 1997, 2006, and 2017—resulted in an average gain of 20% over the remainder of the year. If that scenario plays out, the S&P 500 could close the year near 3350, Lee says.

Source: Barrons Online

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