Stocks are quietly repairing some of the damage done last year, according to Ned Davis Research. The S & P 500 in 2022 suffered its worst annual decline since the financial crisis, losing 19.4%. The benchmark index also entered a bear market, dropping more than 20% from its record high set in early January 2022. Key sources of that downturn were soaring inflation and tighter Federal Reserve monetary policy to fight higher prices. Ned Davis Research's Ed Clissold noted that stocks were "quiet quitting" heading into 2022, as market breadth deteriorated. He noted that, during the fourth quarter of 2021, the percentage of stocks making 252-day and 30-day lows increased "on every pullback." Quiet quitting is a term that came about during the Covid pandemic and refers to employees choosing not to go above and beyond their job requirements. Heading into 2023, the market's quiet quitting "transitioned to a quiet rebuilding," Clissold said, noting that, "Even as the popular averages made new lows in the second half of 2022, breadth gauges were less extreme." This, according to Ned Davis's chief U.S. strategist, suggests that the bear market could be near its end. .SPX mountain 2021-01-13 From 'quiet quitting' to 'quiet rebuilding'? Clissold pointed out that the percentage of stocks making 252-day and 30-day lows peaked at 5.1% and 30.3%, respectively, from Dec. 1 to Tuesday. That's way down from peaks of 32.8% and 74.7% between Sept. 15 and Nov. 15. It's also well below the 41.9% and 61.7% levels seen from June 1 to Aug. 1. "Peaks in 252-day new lows in June and 30-day new lows in September would be consistent with a bear market in its later stages," Clissold said. Ned Davis Research's data also shows that the 11 prior bear markets ended no more than 5½ months after the percentage of stocks making 252-day new lows peaked. To be sure, the strategist noted that there's still "not enough evidence to declare that a bull market is underway." What's more, other strategists on Wall Street have a pretty muted outlook for the stock market in 2023. CNBC's Market Strategist Survey shows the median S & P 500 strategist target sits at 4,100, implying upside of just 6.8% for 2023. The most bearish estimate comes from Barclays' Venu Krishna, who expects the index to fall about 3% for the year.