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H1 2024 Market Performance

The first half of 2024 ended on a high note with the S&P 500 posting an impressive 14.5% gain. To find out more on why, read our H1 market recap here. Historical data suggests that strong first-half performances could set the stage for a robust second half. Let’s look into the historical statistics and probabilities to understand what we may expect for the rest of the year.

H1 Return History (1950-2024)

A review of historical data from 1950 to 2024 shows that the average H1 return stands at 4.3%, while the average H2 return is slightly higher at 5.0%. However, H1 2024 has significantly outperformed these averages with a remarkable 14.5% return.

This substantial gain in the first half of the year is noteworthy, especially when considering the historical context. The average H1 return of 4.3% and H2 return of 5.0% suggest that the market typically performs moderately in the first half and slightly better in the second half. However, the exceptional performance in H1 2024 raises questions about what might be in store for the second half of the year.

Historical Probability of Positive H2

When the first half of the year posts a return greater than 10%, there is an 82.6% probability of a positive return in the second half. Conversely, the probability of a negative H2 after such a strong H1 is only 17.4%.

These probabilities are encouraging for investors who are hoping for continued gains in the latter half of 2024. The high probability of a positive H2 return following a robust H1 suggests that market momentum often carries over into the second half of the year. This historical trend provides a strong foundation for anticipating favorable market conditions in H2 2024.

Returns in H2 Following a Strong H1

Historical data indicates that following a first half return of more than 10%, the average return for the second half is 9.8%. In contrast, when H1 returns are less than 10%, the average H2 return drops to 4.0%.

This stark difference in average returns highlights the impact of a strong first half on the overall market performance. The nearly 10% average return in the second half following a strong H1 underscores the importance of momentum and investor sentiment. It suggests that a strong start to the year can significantly influence the trajectory of market returns in the latter half.

Historical Probability

The probability of an H1 return exceeding 10% is relatively low at 31%, while there is a 69% probability that H1 returns will be less than 10%.

Understanding these probabilities helps to contextualize the significance of H1 2024’s performance. With only a 31% chance of an H1 return exceeding 10%, the 14.5% gain seen in the first half of this year is a rare and notable event. This rarity adds weight to the historical trends and probabilities that suggest a favorable H2 outlook.

Median H1 & H2 Returns (1950-2024)

The median returns tell a similar story, with H1 median return at 5.0% and H2 median return slightly higher at 6.2%.

Median returns provide another layer of insight into historical market performance. The median H1 return of 5.0% and H2 return of 6.2% suggest that, on average, the market performs slightly better in the second half of the year. This reinforces the narrative that strong first-half performance often leads to continued gains in the latter half.

Conclusion

With H1 2024 delivering a stellar 14.5% gain, historical trends suggest a high probability of continued positive performance in H2. Investors should stay informed and consider these statistics when planning their strategies for the remainder of the year. The historical data presents a compelling case for optimism, with an 82.6% probability of a positive return in the second half following a strong first half. Additionally, the nearly 10% average return in H2 after a robust H1 provides further reason for confidence.

As always, while historical data can provide valuable insights, it’s essential to stay abreast of current market conditions and economic indicators. External factors such as geopolitical events, monetary policy changes, and economic data releases can also significantly influence market performance.

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