From Barron's
"It is not the first Fed hike that ends equity bull markets, although it does inject near-term volatility," Citi's global equity strategy team said.
The S&P 500, the Nasdaq, and the Dow see an average decline in the three months following the Fed's first rate increase. The indexes see the most dramatic losses on average around two months after the hike. The S&P 500 sees an average decline of 3.8% during this period.
By the six-month mark, the average index returns turn positive, with the tech-heavy Nasdaq seeing the most significant bounce. The Nasdaq gains an average of nearly 11% six months after a Fed rate increase. The S&P 500's average return at the six-month period is 3.1%.
If the Fed were to deliver a rate increase and signal it's the start of a rate-hike cycle, that's a different story that could rattle the bull market.
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