2020 S&P 500 Recovery Rally ‘Closely Tracking’ 2009 Rebound

Posted by Wayne Duggan

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The historic stock market rally off the 2020 March lows continued on Tuesday, with the SPDR S&P 500 ETF Trust trading higher by 2.3%.

It may seem like the recent market trading action is unprecedented, but DataTrek Research co-founder Nicholas Colas said it’s actually “closely tracking” the market’s 2009 bounce off of the March 9 lows.

In fact, 58 days after the March 23 lows, the S&P 500 is up about 37%, almost perfectly in-line with the 39% index gain 58 days after the March 9, 2009 low. Unfortunately, if the S&P 500 continues to track its 2009 rebound, Colas said investors can anticipate about seven weeks of high volatility and very little overall gains.

Key Differences: Colas warned investors that the S&P 500 index is a lot different than it was back in 2009, and the current economic situation is different as well. First, the S&P 500 is currently trading at around 19.6 times recent peak earnings compared to 10.4 times trailing peak earnings at the same point in 2009…CLICK for complete article