S&P 500: Sluggish Start to 2024 Just a Prelude to Bullish Crescendo?
After a positive year with S&P 500's performance exceeding 20%, slow starts, like the one we've encountered, are a common occurrence.
Historically, these sluggish beginnings often culminate in surprising endings, marked by a potential rally in the second half of the year. Therefore, encountering some weakness at this stage is a normal part of the process.
This same slow start and annual trend occurs in election years, in which we are now. After the first few dull months, we generally then see a bullish trend for the rest of the year.
The chart above shows the S&P 500, from 1950 to 2020, as it performed in each election year throughout the year.
This could be considered a good point to see a similarly positive 2024, as history shows us that outperformance is likely to come in the second half of the year.
Last week witnessed a shift in the ranking of the world's most valuable companies, with a new leader emerging.
Microsoft (NASDAQ:MSFT) overtook Apple (NASDAQ:AAPL) in first place, becoming the largest company by market capitalization.
Apple has not had a particularly outstanding year. Over the past twelve months, revenue has declined, expenses have increased, and operating profit has declined. Earnings per share increased by cents due to share buybacks.
Source: InvestingPro
Although it has struggled to grow, the stock has had another banner year for its shareholders, with a gain of about +50%.
Not only that, if we look at the average performance since 2010, it has had an annual return of 31 percent, which is 18 percent more than the S&P 500.
Apple's shares have also been helped by expanding multiples. it started 2023 with P/E Ratio at 22.3x and finished the year with 29.6x. Valuations are objectively among the highest
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