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Jurrien Timmer, Fidelity’s global macro director, has updated the market outlook following the observed correction in stock markets. Through graphs and explanations shared on social media, Timmer noted that the S&P 500 index has moved in line with average returns during previous presidential terms.
When Will the Decline End?
In the shared graph, Timmer highlighted the average performance of the S&P 500 index according to presidential terms. The data indicated that the current correction period may conclude around July.
While Timmer suggested that this indicator should not be overemphasized, he pointed out that periodic data reflects the general trend.
Fidelity’s Market Forecasts
Timmer also presented a graph including 26 different corrections in the S&P 500 from 1906 to the present. According to this data, the current decline resembles the correction experienced in 2018. Timmer noted the possibility of the index reaching around 4,900, suggesting that market movements indicate a modest correction period lasting several months.
Jurrien Timmer: “While not giving too much weight to this indicator, the repetition of the presidential cycle’s decline in the medium term is progressing nicely. We are currently in the ‘5th year’ (if that makes sense), and the first six months of this year have shown an average decline. This indicates a modest but several-month correction period.”
In another statement, he explained that last week’s brief pause provided relief to the markets, with the index still hovering within the 10% correction zone. Evaluations suggested that the market could exhibit an additional 10% decline or increase in the coming period. Considering that the S&P 500 and cryptocurrencies move together, these assessments also hint at possible future trends for cryptocurrencies.
Timmer emphasized that the current market situation aligns with historical data; however, he also noted that these insights do not guarantee definite outcomes.
His shared insights serve as a reference for market participants to assess the current situation against historical data. The graphs used in the explanations suggest that, from a long-term perspective, market movements parallel past trends. In light of this data, it is crucial for investors to closely monitor developments.
