A Little SPX History: Strong Start = Strong Finish (Patreon)

The history cited in the article is true. According to data from CFRA, a positive first half has led to gains in the second half 72% of the time, above the normal 69% rate in data that goes back to 1945.

Here is a table that summarizes the data:

As you can see, the stronger the start to the year, the stronger the finish is likely to be. When the S&P 500 is up more than 10% through June, the second half has averaged an increase of 8%, that’s nearly double the typical 4.2% average return for the July-through-December period.

A big start for stocks in the first six months of 2023 could be a signal that even bigger things are on the way for the rest of the year.

Historically, a positive first half has led to gains in the second half 72% of the time, above the normal 69% rate in data cited by CFRA that goes back to 1945. However, history also has shown that the stronger the start, the stronger the finish.

When the S&P 500 is up more than 10% through June — it has risen 14.5% year to date — the second-half has averaged an increase of 8%, that’s nearly double the typical 4.2% average return for the July-through-December period, according to CFRA. The scenario has seen gains 82% of the time.

“With this year’s S&P 500 gain of nearly 15% YTD through June 16, history suggests investors hold onto their hats, since a stellar H2 may be in order,” Sam Stovall, CFRA’s chief investment strategist, said in a client note Tuesday.