Estimating The Downside
Estimating the Downside - March 2024
The S&P 500 posted its fourth consecutive monthly gain (+5.2%) in February. The index has advanced 22% since the end of October.
Estimating the Downside - February 2024
The S&P 500 reached new all-time highs in January and closed the month with a modest 1.6% gain. The advance in the numerator widened our downside-to-median estimates another tick.
Estimating the Downside - January 2024
Two years ago, the downside estimates were quite a bit more eye-popping than even today’s still alarming figures.
Estimating the Downside - December 2023
The S&P 500’s 9% November advance erased almost all of the previous three months’ losses. The Index now sits very close to its near-term highs set at the end of July.
Estimating the Downside - November 2023
With October’s 2% loss, the S&P 500 has now experienced three consecutive monthly declines—a streak not achieved since the onset of the pandemic.
Estimating The Downside - October 2023
September’s 5% haircut in the S&P 500 marked its worst month of performance this year. The dip in the market, accompanied by steady-to slightly rising EPS estimates, translated to similar trims for the downside figures.
Estimating the Downside - September 2023
Despite August’s strong second half, the S&P 500 snapped its five-month winning streak. The roughly 2% loss took a little air out of the recently ballooning downside estimates.
Estimating the Downside - August 2023
The S&P 500 has gained 1,000 points (+28%) since recording a contemporary month-end low at the end of last September.
Estimating the Downside - July 2023
June marked the third-consecutive quarterly gain for the S&P 500, with all the results remarkably similar: +7%, +7%, +8%. The index now sits at a level not seen since April 2022.
Estimating the Downside - June 2023
A late-month rally propelled the S&P 500 to a very modest gain for May. The last two months have been awfully quiet as far as volatility, with the index’s daily closing levels sitting in a range of just 149 points since the start of April—some kind of Spring doldrums, perhaps.
Estimating the Downside - May 2023
A late-month rally drove the S&P 500 into positive territory for April—the 1% gain pushed it to its highest monthly close in a year.
Estimating the Downside - April 2023
The S&P 500 shrugged off a few bank failures and advanced 3.5% in March, ending the month above 4,100 for the first time since last July.
Estimating the Downside - March 2023
The S&P 500 sank 2.6% in February, meaning that the index has pretty much gone nowhere for the last six months.
Estimating the Downside - February 2023
The S&P 500 bounced 6.2% in January, recovering nearly all of its December loss.
Estimating the Downside - January 2023
Santa brought the S&P 500 a lump of coal in December 2022, as the index declined 5.9%. That move reversed November’s gain (and then some).
Estimating the Downside - Decemeber 2022
The mid-October market bounce extended through November. The S&P 500’s monthly gain (+5.4%) stretched both of our downside-to-median estimates by congruent amounts. Since September 30th, downside for our “New Era” (1995-to-date) weighted average widened from -5% to -17%.
Estimating the Downside - November 2022
With an 8% S&P 500 advance in October, our valuation measures bounced pretty hard off the contemporary lows. The estimate for downside to the median,1957-to-date, widened from -21% to -27%; while the “New Era” estimate (1995-to-date) worsened to -12% from -5% at the beginning of October.
Estimating the Downside
In September, the S&P 500 suffered its worst monthly loss (-9.3%) since the start of the pandemic.
Estimating the Downside - September 2022
It was a rough back half of August for the S&P 500 as it shed 8% in the final two weeks, overpowering the gains captured earlier in the month. In all, the S&P 500 had a loss of 4.2% for August.
Estimating the Downside - August 2022
Secular bear markets will drop far below median valuation levels. Today, if the S&P 500 sank to the 25th percentile (1957-to-date data), it would lose 41%.