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Three Monster Years for the S&P 500 Set a Towering Bar for January

  • December’s gain could be January’s pain, says FBB’s Bailey
  • Tighter monetary policy may keep traders apprehensive: Natixis

To all the record highs, the months without a correction and every other death-defying feat the stock market has pulled off, add another superlative. The S&P 500 Index has now doubled since New Year’s 2018, capping a stretch of sustained strength with few precedents.

Using monthly closes, you have to go back decades to find another period when the index’s three-year total return exceeded 100%. Two decades, to be exact, to the bursting of the internet bubble. And while nothing in that comparison is basis for panic in any rigorous statistical sense, it at least shows the dauntlessness of the current rally and the challenge investors face in deciding if it’s sustainable.