U.S. stocks have been trading virtually in lockstep with 1954, the best year for American equity and the time when shares finally recovered all their losses from the Great Depression, Bloomberg reported.
Standard & Poor's 500 index returns this year are tracking day-to-day price moves in 1954 almost identically, according to data compiled by Bespoke Investment Group and Bloomberg. In no other year are the trading patterns more similar to 2013 since data on the index began 86 years ago. The correlation coefficient between this year and 1954, when the benchmark gauge rose 45 percent, is 0.95 out of a maximum of 1.
American equities this year climbed above the 2007 peak before the global financial crisis, like they did in 1954 when the S&P 500 reached a new high for the first time since 1929. While bearish investors say the correlation is irrelevant, bulls say the index will keep rising the way it did 59 years ago, as investors regain faith in U.S. profits.
The S&P 500 fell 1.1 percent last week to 1,691.75, the biggest drop since August, on concern that a political showdown over government spending will hurt economic growth. The index is up 19 percent in 2013 and advanced 150 percent since the start of the bull market in March 2009.
Unless Congress reaches an 11th-hour deal today, the government will shut down tomorrow.