Yesterday was another difficult day on Wall Street, with the S&P 500 Index dropping by a whopping 7.6 percent - its worst day since the 2008 market meltdown. Pent-up anxiety over the weekend may have contributed to another Black Monday.
What does this mean for the future? Data compiled by Bespoke Investment Group strategists show that the S&P 500 has put in declines of 5 percent or worse on 10 other Mondays since 1952, with today’s drop representing the 11th time.
The good news, however, is that on average, the S&P 500 has returned 12.75 percent in the six months after the daily 5 percent drop. Gains are also higher in the following day, up 4.2 percent on average, as well the next week and month, with gains of 5.1 percent and 3.2 percent, respectively.