A bullish January barometer supports 5000+ for the S&P 500 in 2024, according to the latest Bank of America research note on Thursday.
Analysts at the firm claim that an up January for SPX is a bullish signal, and the 2024 January barometer suggests the SPX will be between 5260 and 5400 into year-end.
"The month of January is a reasonably good predictor of the year based on S&P 500 data going back to 1928," said the investment bank. "When January is up, which is the scenario for 2024, the year has been up 80% of the time with an average return of 13.2%, and the rest of the year (February-December) has been up 78% of the time with an average return of 8.7%."
"This does not rule out SPX 5260-5400 into year-end 2024. The average returns for all years and all February-December periods of 7.9% and 6.5%, respectively, would suggest SPX at 5140-5160," they added.
Meanwhile, BofA notes that an up January is also bullish when it's a presidential election year, with an 11 out of 11 positive hit rate.
However, they also cautioned that one risk to the bullish signals is the fact that the SPX dropped 0.13% over the first five sessions of 2024.
"Data back to 1928 suggest that the SPX is less robust over the rest of the year when the index drops over the first five days of January with the SPX trading higher 50% of the time on an average return of 3.2%," said BofA.