Analyst says stock market of 2020 is just like 2009 with big upside for stocks ahead
Nicholas Colas, co-founder of DataTrek Research says “2020 is just like 2009,” Colas is tracking the 2009-2020 analogy ever since the March If the comparison holds, he writes, we should expect a period of stagnation, and then a late-year rally.
As of 58 days after the low of March 23, 2020, the S&P 500 SPX, +1.89% is 37.1% higher. In 2009, the low came on March 9, and 58 days later, the index was 39.4% higher.
In 2020, stocks broke twice to upside from the 2009 experience but failed both times. The first was on April 14, when the 2020 rally got ahead of 2009 by 11 points (+27.2% from the lows vs. 16.4% in 2009).
Stocks then gave up all those gains in the next 5 days and The second was just last Monday when the index was 13 points ahead of the 2009 rally, and you know what happened next: Thursday’s 6% drop and other declines have closed the gap again,” Colas writes.
The parallels between the two periods are all the more striking because of how different the stock market has become.
Colas says — the 2020 rebound, like the fears that brought the stock market to its knees in March, have been much broader-based.