S&P 500 Correction May End by July, According to Fidelity Analyst

Jurrien Timmer, Fidelity’s director of global macro, has revised his market outlook following a widespread decline in stock prices.

Timmer presented a chart illustrating the average returns of the S&P 500 during different stages of presidential terms.

The data suggests the index is largely following historical trends, with the current downturn potentially concluding by mid-year.

While Timmer cautioned against overemphasizing this pattern, he noted that the cycle’s mid-term year (2022) has played out as expected.

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Currently in the “fifth year” of the presidential cycle, which typically sees declines in the first half, Timmer expects the market to experience a mild, extended correction.

Timmer also provided a closer look at 26 S&P 500 corrections dating back to 1906, observing that the ongoing pullback mirrors the 2018 market dip.

He anticipates that the S&P 500 might reach a bottom near the 4,900 level. After a brief recovery last week, he noted that markets remain in a 10% correction, uncertain whether the next phase will see a rise or fall.

Alexander Stefanov