Why April Could See the Stock Market Move Even Higher (2024)

FAQs

Why April Could See the Stock Market Move Even Higher? ›

One theory behind April's positive performance is that investors receive tax refunds that month and inject that money into the market pushing prices higher.

Global markets: Markets across Asia-Pacific were ruling higher after China's manufacturing activity expanded at its fastest pace in nearly two years. The Caixin survey showed manufacturing PMI rose to 51.7 in May from 51.4 the previous month, at its fastest pace since June 2022.

Key Takeaways

Stock prices are driven by a variety of factors, but ultimately the price at any given moment is due to the supply and demand at that point in time in the market. Fundamental factors drive stock prices based on a company's earnings and profitability from producing and selling goods and services.

For each share they buy, an investor owns a piece of that company. In large part, supply and demand dictate the per-share price of a stock. If demand for a limited number of shares outpaces the supply, then the stock price normally rises. And if the supply is greater than demand, the stock price typically falls.

If there is a greater number of buyers than sellers (more demand), the buyers bid up the prices of the stocks to entice sellers to sell more. If there are more sellers than buyers, prices go down until they reach a level that entices buyers.

According to Reuters, since 1945, April and December are tied as the best-performing months of the year for stocks, with an average return of 1.6%. (September is notoriously the worst, with an average loss of -0.6%.)

Mondays and Fridays tend to be good days to trade stocks, while the middle of the week is less volatile. Historically, April, October, and November have been the best months to buy stocks, while September has shown the worst performance.

"Over the last 10 years, May returns have averaged 0.7%, with nine of the last 10 months posting positive results." May historically marked the start of the S&P 500's "worst six-month stretch," according to Turnquist, who said that performance gives "some credence to the 'Sell in May and Go Away' adage."

What is the stock market prediction for 2024? ›

The Big Money bulls forecast that the Dow Jones Industrial Average will end 2024 at about 41,231, 9% higher than current levels. Market optimists had a mean forecast of 5461 for the S&P 500 and 17,143 for the Nasdaq Composite —up 9% and 10%, respectively, from where the indexes were trading on May 1.

Analysts say a strong economy, moderating inflation, robust corporate profits, and trust in the Federal Reserve are buoying investor confidence and helping stocks rise.

Just as a high number of buyers creates value, a high number of sellers erodes value. So even though it might feel like someone is taking your money when your stock declines, the cash is simply disappearing into thin air with the popularity of the stock.

Eighty percent of American families had virtually no savings, and only one-half to 1 percent of Americans controlled over a third of the wealth.

If you are a short-term investor, bank CDs and Treasury securities are a good bet. If you are investing for a longer time period, fixed or indexed annuities or even indexed universal life insurance products can provide better returns than Treasury bonds.

S&P 500 Index

The S&P 500 (^GSPC 0.80%) has surged through 24 record highs in 2024 after going more than 500 trading days without a single one. Factors contributing those gains include anticipated interest rate cuts and excitement about artificial intelligence (AI), both of which promise to stimulate economic growth.

The retailer also raised its forecasts for sales and profitability this year despite saying the outlook for the economy remains uncertain. Stocks broadly got a boost from easing Treasury yields in the bond market after the latest reading on inflation came in roughly as expected.

Uptrend lines act as support and indicate that there is more demand than supply, even as the price rises. As long as prices remain above the trend line, the uptrend is considered to be intact.

The S&P 500 surprisingly rose an average of 1% during all recession periods since 1945. That's because markets usually top out before the start of recessions and bottom out before their conclusion. In other words, the worst is over for stocks before it's over for the rest of the economy.