In light of equities’ stellar YTD performance, and considering rampant speculation that a correction’s not only inevitable, but imminent, it’s worth asking what history tells us about rest-of-year returns when the S&P notches a Q1 gain of at least 10%.

Put as a question: When was the last time the world’s benchmark risk asset par excellence rose double-digits in Q1 only to fall during the rest of the year?

The answer, as it turns out, is never. That’s basically never happened, with the “basically” caveat to account for 1987, an outlier for reasons I assume are obvious even to younger readers.

As the figure above shows, a rest-of-year decline for the US benchmark would be a historical anomaly in the context of Q1’s rally, the third-best of the past two decades and among the best on record.

That doesn’t preclude drawdowns, of course. Indeed, Truist data suggests the average pullback during the years shown in the visual was 11%. If you exclude 1987, it’s 9%.

For what it’s worth, Bloomberg, citing JPMorgan Asset Management, noted Tuesday that the year with the shallowest drawdown (a mere ~3%) looking back more than four decades was 1995. I was going to suggest that all of these statistics are largely meaningless until I ran across that one: 1995 was the last soft landing.

Notwithstanding some turbulence early this week when equities balked at an early-Q2 bond selloff (the implication being that good news is on the brink of becoming bad news given the hawkish read-through of macro strength for Fed policy), Jerome Powell’s still on course for a fairy tale ending to America’s worst economic nightmare in a generation.

If Powell sticks the proverbial landing, the 1995 statistic mentioned above becomes the precedent, which bodes well for stocks, particularly considering that now, as then, a new technology holds the promise of a productivity renaissance.

Of course, the late-90s US equity boom ended in its own nightmare. But don’t worry so much about that. It was half a decade before the bottom fell out for “irrational exuberance.” If the generally parlous state of the world in 2024’s any indication, we’ll all be dead by 2030.