The S&P 500 just missed the dreaded milestone of falling into a bear market, and that could mean strong gains for the benchmark index going forward. At one point last week, the S&P 500 was down more than 19% from its record closing high hit in early January. However, a bounce on Friday helped the index dodge a bear market — typically defined as a 20% decline from a recent high on a close-to-close basis. This is the sixth time since 1978 that the S&P 500 has fallen more than 19% without entering a bear market, according to Credit Suisse. The previous five instances were followed by monster wins over the next 12 months. For example, after bottoming out in March 1978, the index rose 13% over the next year. The S&P also posted gains of more than 37% after hitting lows in October 1998 and December 2018. It is also up 29% after bottoming in October 1990 and 32% after a tumble in October 2011. Gains over the following three and six months were also strong. Certainly, Credit Suisse pointed out that this time the market may not need the Federal Reserve to help it, as it has in many previous near misses. “On three of those occasions there was an obvious trigger (with hindsight) that explained the bottom, with the Fed softening or hinting at easing on each of those ‘near bear markets,'” the bank said. This time, the Fed has hiked rates to quell the strongest inflationary pressures in decades, and Credit Suisse says a central bank correction is unlikely. “We are struggling at the moment to see an obvious immediate catalyst to halt further declines. It seems highly unlikely that the Fed would relax or imply such an approach.
https://www.cnbc.com/2022/05/17/the-sp-500-dodged-a-bear-howve-stocks-done-after-other-near-misses.html The S&P 500 has dodged a bear. How have stocks fared after other near misses?