The stock market volatility has been rough on shares as evidenced by the decline in stock indices. The S&P 500 has declined from its winning stretch that had been going on since 2015 in the first quarter. Investors however predict a better month in April. The S&P 500 declined by one percent at the end of this quarter. This is the first negative quarter since the year 2015. Since 2009, the index has not ended in such way. The decline snaps the positive stretch of the index that was usually observed every year from January through March.
April expected to show double digit gains as the year moves forward
Market strategists have asked investors to forget about the last quarter and focus on the promises heralded by the month of April. This comes from the fact that historically, April has always been a strong month for markets.
For S&P 500 especially the month of April over the past nine years have always been positive. Since the year 1950, an average gain of 1.5 percent has been recorded in April. This figure is, at times, overshadowed by the bullish months of November and December.
From a point of view that is purely based on seasonal history, April has always proved to be a good month and chances are that the market should continue forward somewhat on a better note than the previous quarter.
The declines in the month of February and March were responsible for the decline of the S&P 500 index. Despite this, the index has moved slightly upwards over the past week and strategists hope that this little push will continue in the month of April.
April is also expected to show an increase in earnings provided companies surpass the expected level of growth. This will act as a catalyst when it comes to stock market gains.
Analysts have predicted that the S&P companies are likely to see an eighteen percent growth in the fiscal year 2018. If this happens, it would be among the highest earnings since 2010. Also, the economy will continue to improve in such a scenario and maybe even lead to double digit gains for the rest of the year.
Experts have said that the slight decline in stock market indices may be just the market stopping to catch its breath before getting ready for the big gains.
Once the major banks release their reports on April 13, the earnings in the first quarter will kick off.