Markets were little changed on Thursday. The S&P 500 was flat while the Nikkei 225 and STOXX Europe 600 rose 0.1 percent.
“The market is trading at a premium to the historical average,” said Lindsey Bell, an investment strategist at CFRA Research. “We see a little bit of upside from here for the rest of the year, but you’ll see volatility throughout the course of earnings season, for sure.”
Earnings season in the US starts on Friday and while analysts are projecting S&P 500 earnings to fall 4.2 percent year-over-year, they see a seven percent gain over the next 12 months for the S&P 500.
History seems to be on the bull's side.
According to BMO, since 1935, every time the S&P 500 rose 10 percent or more in the first quarter of a year, the market managed to rise 6 percent more on average for the rest of the year, with positive performance during 11 of the 12 times.
The S&P 500 rose 13 percent in the first three months of 2019.
BMO also found that since 1990, when the central bank changed course with its monetary policy, the market rose nearly 10 percent on average from the date of the final rate hike to the date of a rate cut.
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