Stock market crashes since 1870 show 2020 bear rally is doomed: SocGen - Business Insider

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'Beware of the oddity': A Wall Street firm studied every market crash over the last 150 years to reveal how abnormal this one is — and concluded that stocks are doomed for another fall

for stocks since 1987. But this stand-out performance is not being universally cheered on Wall Street. 's 13% ascent last month can be traced back to its bottom on March 23 — the same day the Federal Reserve essentially pledged to do whatever it takes to support the economy during the coronavirus pandemic.

His study of bear markets since 1870 led him to conclude that the S&P 500 would finish the year at about 2,715, representing a 7% decline from its April close.Lapthorne's analysis started by including episodes since 1870 when the S&P 500's decline could ostensibly have been rounded up to 20%. One recent example was the late-2018 sell-off that winded up as a 19.6% decline.bear market was not empirically ideal.

He found that on average, the S&P 500 recovered by 4% within a month, 13% within three months, and 27% within a year. The typical trajectory of recoveries is similar even when the Great Depression, often likened to the coronavirus crisis, is included.The brisk rally of 2020 cannot be divorced from the record amount of government stimulus that flowed into the economy. On this account, Lapthorne said the market's roaring comeback is reasonable.

 

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I feel same too... October/November 2020.

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