Here’s what history indicates is in store for U.S. and global stocks in April
Stock markets appear to have survived March despite a scare from the banking sector. The S & P 500 gained 3.5% and the MSCI World Index rose 2.8% in March, despite dropping in the first half of the month after Silicon Valley Bank was shut in the U.S. and Credit Suisse had to be rescued in Europe . For investors, the rollercoaster ride is likely to come to an end in April, if history is anything to go by. According to CNBC Pro’s analysis of S & P 500 index data on FactSet dating back to 1928, if there is a rebound in the first quarter following a down year for S & P 500, the index rises 78% of the time in April. Historically, when the S & P 500 does rise under these conditions, it delivers an average return rate of around 3%. But, on the few occasions it has fallen, the losses have been slightly steeper, with investors losing an average of 3.76% . Past performance does not necessarily predict future results, however. .SPX 1Y mountain For the second quarter as a whole, the direction of travel for the S & P 500 was less clear , but on a yearly basis, investors may find comfort in knowing that stock markets generally deliver positive returns after a negative annual performance. Global stocks The MSCI World Index , which captures over 1,500 large and mid-cap stocks across 23 developed countries, tends to perform very similarly to its large U.S. benchmark peer in the month of April. The index has risen 75% of the time over the month following a negative year of returns bouncing off a positive first quarter. However, the index offers lower volatility compared to the S & P 500. When stocks rose, they went up by 2.53%. Conversely, when stocks declined, they fell by 3.24%. The MSCI World’s lower volatility statistic was also previously observed in its second quarter and full-year performances. — MSCI derived data for the World index before 1986 by calculating how the index might have performed over that period had the index existed. Data was sourced from FactSet.
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