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Estimating The Downside

May 05 2022

S&P 500 Downside?

  • May 5, 2022

The April haircut in the S&P 500 (-8.8%) combined with February and January losses brought a few of our 1995-to-date “Estimating The Downside” measures very close to their 27-year medians for the first time in recent memory. At present, downside to the median is now -16%. Based on 1957-to-date, the S&P 500’s estimated downside to the median is -30%.

Apr 06 2022

Estimating the Downside - April 2022

  • Apr 6, 2022

The S&P 500 clawed back some of its losses from earlier in the quarter but still declined almost 5% for the first three months of 2022—breaking a streak of seven consecutive advancing quarters.

Mar 05 2022

Estimating the Downside - March 2022

  • Mar 5, 2022

The S&P 500 suffered its first back-to-back monthly decline since the fall of 2020. From its month-end closing high in December to the end of February, the index has shed 8.2%. Over those two months, our downside-to-median estimates have both shrunk by a similar 7%.

Feb 05 2022

Estimating the Downside - February 2022

  • Feb 5, 2022

With a price decline of -5.2%, the S&P 500 suffered its worst month since March 2020. The carnage would have been much more severe (and downside estimates more rosy) had it not bounced +4.4% in the last two trading days.

Jan 06 2022

Estimating the Downside - January 2022

  • Jan 6, 2022

The S&P 500 closed out 2021 with a solid +4.4% monthly price gain. For the year, it clobbered all other indexes—foreign and domestic—with a +27% jump.

Dec 06 2021

Estimating the Downside - December 2021

  • Dec 6, 2021

Spooked by the new Covid variant and a more hawkish Fed, the S&P 500 gave up its November gains in the last few trading days of the month. Its loss of -0.8% was minimal compared to other market cap tiers.

Nov 04 2021

Estimating The Downside - November 2021

  • Nov 4, 2021

The S&P 500 gained 6.9% in October—it was the best month in a year. The steep rise in prices more than cancelled-out the brief dip in September. However, improving fundamentals limited the adjustments within our downside estimates.

Oct 06 2021

Estimating The Downside - October 2021

  • Oct 6, 2021

The S&P 500 shed 4.8% in September—its worst month since the panic of March 2020. This trimming of the numerator helped make our downside to median estimates a little less negative. In fact, these are the “best” figures we’ve seen since February.

Sep 07 2021

Estimating The Downside - September 2021

  • Sep 7, 2021

The S&P 500 stayed on cruise control in August, notching its seventh consecutive monthly gain. During that streak, our downside to median estimates have remained in a tight range as both numerators and denominators increased.

Aug 05 2021

Estimating The Downside - August 2021

  • Aug 5, 2021

Make that six consecutive months of advances for the S&P 500. Since the end of January, the index has gained 18% (price return) while our downside-to-median estimates have widened very little, to -43% from -41% (1957-to-date) and to -32% from -29% (new era 1995-to-date).

Jul 08 2021

Estimating The Downside - July 2021

  • Jul 8, 2021

The S&P 500 posted its fifth consecutive monthly advance in June and its fifth consecutive quarterly advance as we closed out Q2-21. The index’s 8.2% second quarter gain has not exacerbated our downside-to-median estimates, which stand exactly where they did at the end of March.

Jun 04 2021

Estimating The Downside - June 2021

  • Jun 4, 2021

The S&P 500 posted its fourth consecutive winning month in May. It was a modest gain (+0.6%), but all of our downside estimates managed to improve—a testament to the rapidly rising fundamentals.

May 06 2021

Estimating The Downside - May 2021

  • May 6, 2021

As the S&P 500 continues setting new records, so do our downside-to-median estimates. Once again, dramatically improving fundamentals could not keep pace with the index’s rise in price.

Apr 07 2021

Estimating The Downside - April 2021

  • Apr 7, 2021

The S&P 500 gained 4.2% in March. Again, as has been the case since last summer, improving underlying fundamentals have not been able to offset the rise in the index’s price.

Mar 04 2021

Estimating The Downside - March 2021

  • Mar 4, 2021

Back To Median Levels

This multi-factor estimate of stock market risk is based on a regression to median stock market levels. The valuation comparisons shown in the itemized tables consider all inflation periods since 1957. The summary tables present: 1) “all years” 1926-to-date; 2) periods of low (< 3%) inflation; and, 3) periods of high (> 5%) inflation.

Feb 04 2021

Estimating The Downside - February 2021

  • Feb 4, 2021

The S&P 500 had a monthly loss of 1% to start 2021. This moved our downside-to-median estimate just a tick under its contemporary extreme of -42%.

Jan 07 2021

Estimating The Downside - January 2021

  • Jan 7, 2021

The S&P 500 gained another 3.7% in December to close the year with a price return of +16.3%.

Dec 04 2020

Estimating The Downside - December 2020

  • Dec 4, 2020

The S&P 500 ripped to new all-time highs in November, posting a 10.8% gain. This move pushed our downside to median estimate for the index from -36% to -41%.

Nov 05 2020

Estimating the Downside - November 2020

  • Nov 5, 2020

Late-month weakness led to another monthly decline in the S&P 500. Now down roughly 7% since the end of August, our downside-to-median estimate has moved from -42% to today’s -36%.

Oct 06 2020

Estimating the Downside - October 2020

  • Oct 6, 2020

The S&P 500 broke a five-month winning streak and stumbled -3.9% in September.