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Best Quarter Since '98: What's Next?

The S&P 500 posted its best first quarter since 1998, while the Dow Industrials had its biggest Q1 since 1999, each index rising 5.4% and 6.4%, respectively.

Could this be a bullish sing for the rest of the year?

Investors will be encouraged to learn that ever since 1950, whenever the Dow or the S&P had risen this much in the first quarter, each has never finished the year with a loss.

Moreover, on those occasions, the S&P has usually continued to build upon a strong Q1 gain over the rest of the year. Since 1950, in the 25 times that the S&P 500 has been up 4% or more in the first quarter, the index has posted a gain over the last 3 quarters of the year on all but 2 occasions (the exceptions being 1956 and 1987).

However, the markets won't always necessarily see stronger gains in the final 9 months of the year. Just under half the time (11 out of 25 occasions) gains moderate, with the rise from Q2 through Q4 being less than that year’s Q1 increase.


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