What happened last time? › Economy
What happens when the money supply (M2) grows more than 10% in a year?
It has happened 10 times since 1960. A year after it began, the S&P 500 was up 8 of 10 times, with a median move of +11.0%. On an ordinary day in the same years the median was +10.6%, up 75% of the time.
M2 money supply above 10% a year. Not true on 2026-09-25.
What came next
| 1 month later | 1 year later | 3 years later | |
|---|---|---|---|
| S&P 500 | +0.4% 50% up · n 10 · normal +1.1% | +11.0% 80% up · n 10 · normal +10.6% | +37.8% 90% up · n 10 · normal +27.8% |
| Gold | -1.5% 10% up · n 10 · normal 0.0% | -3.8% 40% up · n 10 · normal +2.9% | -24.1% 40% up · n 10 · normal +10.4% |
| Oil | -1.4% 20% up · n 10 · normal 0.0% | +6.9% 70% up · n 10 · normal 0.0% | -8.0% 50% up · n 10 · normal +8.9% |
| 10-year yield (pts) | +0.17 pts 70% up · n 10 · normal 0.00 pts | +0.21 pts 60% up · n 10 · normal +0.06 pts | -0.26 pts 50% up · n 10 · normal -0.06 pts |
| Inflation, CPI y/y (pts) | -0.22 pts 22% up · n 9 · normal -0.00 pts | -1.36 pts 20% up · n 10 · normal +0.04 pts | -1.88 pts 30% up · n 10 · normal +0.04 pts |
| Unemployment rate (pts) | 0.00 pts 30% up · n 10 · normal 0.00 pts | +0.30 pts 50% up · n 10 · normal -0.30 pts | -1.30 pts 30% up · n 10 · normal -0.70 pts |
Median move after each episode began, how often it rose, and how many episodes had data. "Normal" is the same move from any trading day in the same years.
Every time it happened
- 2020-04-16 · true for 511 trading days · S&P 500 a year later: +49.5%
- 2012-02-16 · true for 82 trading days · S&P 500 a year later: +11.9%
- 2011-09-15 · true for 40 trading days · S&P 500 a year later: +21.2%
- 2001-10-11 · true for 86 trading days · S&P 500 a year later: -23.9%
- 1983-03-11 · true for 126 trading days · S&P 500 a year later: +2.1%
- 1982-01-15 · true for 20 trading days · S&P 500 a year later: +26.1%
- 1981-04-10 · true for 87 trading days · S&P 500 a year later: -13.6%
- 1980-02-15 · true for 251 trading days · S&P 500 a year later: +10.0%
- 1975-08-13 · true for 632 trading days · S&P 500 a year later: +21.2%
- 1971-04-13 · true for 611 trading days · S&P 500 a year later: +7.0%
- 10 separate episodes: a new one starts after 30 days without a match, so one long selloff counts once.
- Try enough situations and one will look like an edge by chance.
- Macro numbers are as published at the time. Stocks include companies that later died.
- How these numbers are made.
More about economy
- What happens when real GDP is smaller than a year ago?
- What happens when real GDP grows more than 5% in a year?
- What happens when industrial production is lower than a year ago?
- What happens when retail sales are lower than a year ago?
- What happens when housing starts fall 30% in a year?
- What happens when consumer sentiment is below 60?
- What happens when consumer sentiment is below 55?
- What happens when the money supply (M2) shrinks over a year?