Why Buy U.S. Stocks After GDP’s Collapse? Wait 12 Months
Buyers of U.S. stocks after the economy shrank in the first quarter have history on their side, according to Keith Lerner, chief market strategist at SunTrust Private Wealth Management. Gross domestic product contracted at an annual rate of 4.8%, marking the 13th quarterly decline of more than 4% since 1949, according to data compiled by Bloomberg. After each previous instance, the S&P 500 Index gained more than 10% during the next 12 months. This track record helps explain a “market-economy disconnect” seen lately, Lerner wrote in a report last week.