Six months have passed since the S&P 500 index touched its lowest level in more than two years after shedding about 25% of its value at the nadir of 2022’s bear market. A recovery since the start of 2023 has seen the large capitalization index rise more than 17% from its Oct. 12 closing low of 3,577.03, according to FactSet data.
However, investors still have plenty of reason to fear that the worst has yet to arrive, if history is any guide, according to Warren Pies, the founder of research shop 3Fourteen Research. Pies and his team highlighted four reasons in a recent note to clients that was shared with MarketWatch. “The last six months hold very little resemblance to a typical post-bottom environment,” he said in a note. The S&P 500
was trading marginally lower early Wednesday, but it has risen 6.8% since the start of the year, and 17.1% from its intraday low reached on Oct. 13, 2022, according to FactSet data. The lowest closing level arrived one day earlier, when the large-cap index finished at 3,577, its lowest end-of-day level since November 2020.Earnings expectations continue to fall Earnings expectations for S&P 500 companies are a key metric for investors, since they are used to calculate the market’s forward price-to-earnings ratio, which is one of the most popular valuation metrics used by investment analysts. Typically, forward earnings estimates start to recover between three and six months …