The S&P 500’s strong start to 2024 has been met with a pullback in April. In our most recent monthly commentary, we explored how the market typically reacts when the S&P 500 jumps 10% or more in the first quarter. Since 1950, this scenario has occurred 11 times, and in 90.9% of those instances, the final nine months of the year saw positive returns.

While April is generally one of the strongest months for the market, the S&P 500 was positive only 63.6% of the time following a 10%+ Q1 rally. Barring a significant upswing in the remaining trading days of April 2024, this statistic is likely to adjust to 58.33%.

This week, we shift our focus to the historical performance of the S&P 500 during election years, when the first quarter saw gains of at least 5%. There are five instances that meet this criterion from past election years, and by analyzing these cases, we aim to identify potential patterns.

(Source: Carson Investment Research)

The chart tracks the year-to-date performance of the S&P 500 in blue, while the orange line represents the average of the five previous instances during election years when the first quarter saw gains of at least 5%. In 2024, the S&P 500’s performance has initially overshot the orange line to the upside but has also experienced an exaggerated downturn to kick off Q2.

Below are the 5 years referenced in orange and the YTD Performance.  While past performance isn’t indicative of future results, we like to use it as a guide when understanding previous volatile performance.

End of Year Performance

1956: 2.62%

1964: 12.97%

1972: 15.63%

1976: 19.15%

2012: 13.41%

2024: ???

Presented by the Financial Planning Committee of Lake Street, an SEC Registered Investment Adviser

The information contained herein constitutes general information and is not directed to, designed for, or individually tailored to, any particular investor or potential investor. This report is not intended to be a client-specific suitability analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold or sell securities. Do not use this report as the sole basis for investment decisions. Do not select an asset class or investment product based on performance alone. Consider all relevant information, including your existing portfolio, investment objectives, risk tolerance, liquidity needs and investment time horizon. Diversification does not ensure a profit or guarantee against a loss. There is no assurance that any investment strategy will be successful. Investing involves risk and you may incur a profit or a loss.