History Says the S&P 500 Is Headed Higher in April, but Some Wall Street Analysts See a Stock Market Correction Ahead
The S&P 500 (SNPINDEX: ^GSPC) advanced 10.2% during the first three months of the year, its second-best first quarter of the past decade. The communications services sector led the market higher (+15.6%), followed by the energy sector (+12.7%), and the information technology sector (+12.5%). Real estate was the only sector to decline during the first quarter.
However, the S&P 500 has reversed course in April, slipping 4% month to date, as hotter-than-expected inflation and strong retail sales in March have dampened expectations the Federal Reserve will cut interest rates in June. Investors are also concerned about geopolitical tensions in the Middle East.
What makes the current situation interesting is the divergence from historical patterns. Morgan Stanley analysts recently wrote, "April has been one of the most consistently positive months of the year, with the S&P 500 gaining ground in 73% of Aprils since 1957, 80% since 1994, and nine of the past 10."
Source Fool.com
