Midterm history points to a possible S&P 500 year-end lift
Deutsche Bank says the index has risen in 21 of 23 midterm cycles, while expected earnings growth may support the pattern.
Key takeaways
- The S&P 500 rose in 21 of the last 23 midterm cycles across a three-month window.
- Deutsche Bank strategist Jim Reid cited expected S&P 500 earnings growth of roughly 30% year over year.
The S&P 500 has risen in 21 of the last 23 midterm election cycles from one month before the vote to two months after, according to Deutsche Bank research. Strategist Jim Reid said the market has entered a historically stronger seasonal period.
As of Thursday’s close, the index stood at 7,765.36, down 0.47% from the previous close. Reid said the median return in the three-month window surrounding midterms was 7%.
The historical pattern has exceptions: stocks fell around the 1978 and 2018 midterms. Reid said S&P 500 earnings are now expected to rise roughly 30% year over year, which he views as a potential tailwind for the seasonal trend.
This article was produced with the help of AI technology. Source: Yahoo Finance
