Another Leg Down for Stocks?

Plus: What History Says About This Bear Market You are receiving this limited-time email resource as a subscriber to Kiplinger's free e-newsletters. We will continue to publish this daily throughout the height of the coronavirus outbreak. To unsubscribe at any time, simply click the link in the footer below. APRIL 1, 2020 [View in browser]( [Corona]( WHAT YOU NEED TO KNOW ABOUT THE CORONAVIRUS OUTBREAK Investors, beware the dead-cat bounce. After hitting its recent low on March 20, the S&P 500 stock index rose sharply last week, prompting some optimists to talk about a new bull market. But bear markets are famous for head-fake rallies, otherwise known on Wall Street as dead-cat bounces. Indeed, markets are already down again this week amid the steady drumbeat of bad news about the public health situation. SEE ALSO: [19 Dividend Aristocrats That Have Gone on Deep Discount]( Ben Carlson, author of the A Wealth of Common Sense blog, [notes]( plenty of precedents for last week's run-up. During the Great Depression crash there was a 47% rally from late-1929 until the early spring of 1930, before stocks sank again, ultimately losing more than 80%. The 1973-1974 bear market saw a 20% bounce before it was over and the 2007-2009 crash gave us a gain of more than 25% that eventually evaporated. Investment firm CFRA won't call a new bull market until it sees a 20% advance that is not undercut for at least six months. History suggests we'll see a retest of the recent low, triggered by anticipated weak economic data released in the coming weeks, says CFRA chief strategist Sam Stovall. Even if we've already seen the low for this bear market, down 32% at its nadir so far, volatility is likely to persist, he says. And given the history of contractions in both corporate earnings and price-earnings multiples during post World War II recessions, Stovall says we could see the S&P 500 post a peak-to-trough decline of 48%, making it a "mega-meltdown." Free download, [The Kiplinger Letter's Forecast](. No information required from you. SPONSORED CONTENT FROM BARCLAYS [Time To Put Your Money Back To Work]( [Time To Put Your Money Back To Work]( No minimum deposit to open. [READ MORE]( RELATED LINKS [10 Facts You Must Know About Recessions]( [7 Stock Picks That Analysts Are Actually Upgrading Now]( [7 Oil and Gas Stocks That Have Entered Dangerous Waters]( [15 Money-Smart Ways to Spend Your Coronavirus Quarantine Time]( [11 Ways the Stimulus Package and Other Government Measures Could Help You]( [Kiplinger] [Facebook]( [Twitter]( [LinkedIn]( [Google+]( [Tumbler]( Send this to a friend. [Click here.]( All content ©2020 The Kiplinger Washington Editors 1100 13th Street, NW, Suite 1000 Washington, D.C. 20005 Thank you for subscribing to Kiplinger's A Step Ahead, a free resource to help readers navigate special circumstances such as the coronavirus outbreak. If you ever wish to stop receiving this daily service, please [click here to unsubscribe.](