J.P. Morgan (JPM) wants you to have a Happy Thanksgiving, and not worry about the stock market.
Forget that the market has not experienced a 10% correction this year, which the nattering nabobs of negativity have wished for since the stock market has advanced so strongly and everyone knows that which goes up must come down even if it is just temporary.
“It turns out,” the bank’s strategist, Thomas Lee told clients earlier today, “that a 26% gain in the S&P 500 is quite ordinary.”
Since 1897, Lee's research found that the stock market rises more than 20% about once every three years. Double-digit gains are even common.
“For instance, there are 57 years when the market was up more than 10% and only 19 years up single digits. Meaning, that when the market is positive for the year, we are three times more likely to see a double-digit gain,” Lee advised clients in a Wednesday note.
So, gentle reader, you may ask yourself what does any of this historical hullabaloo have to do with you? Well, it seems Santa Claus will come to Wall and Broad, and bears will go elsewhere. Lee says history suggests an 80% chance that stocks will advance in December, and that the S&P 500 Index will gain an average of 2.3%, or 42-points.
Tomorrow, when you raise your glass of wine, at the Thanksgiving table, quietly say may the past be prologue and softly knock on wood.