S&P 500 has fallen by 20 percent this year, but here's why.com.

S&P 500 has fallen by 20 percent this year, but here's why.com.

After the worst start to the year for stocks since 1970, investors are looking for signs of relief, with the S&P 500 falling by more than 20 percent since the beginning of the year.

Most strategists think there will be more declines in the short term, but Evercore ISI Senior Managing Director Julian Emanuel sees two reasons for optimism.

The veteran strategist told Yahoo Finance Live that they can step back and we can say that in terms of inflation, one thing we re focusing on, gasoline prices, has started to decline. The yields have started to decline, and that is a positive. The average price at the pump has fallen to $4.84 per gallon from $5 in recent weeks, according to AAA data. Patrick De Haan, GasBuddy's head of petroleum analysis, said it could fall to under $4.80 a gallon by July 4.

Any decline could help, because of the prices that have been one of the biggest contributors to sagging consumer confidence and elevated inflation.

In addition to a report showing the lowest reading for consumer expectations since 2013, the consumer's grimmer outlook was driven by rising gas and food prices, according to Lynn Franco, Senior Director of Economic Indicators at The Conference Board.

After a huge gain this year, bond yields are beginning to decline, according to Emmanuel, dropping by 45 basis points since June 14. In the year 2022, stock prices and bond prices tend to be moving inversely to price, which is why the yields of Treasury tend to move inversely to price.

In a year where the volatility is caused by the fact that bonds and stocks are consistently moving together, yields are declining, Emanuel said.

While the economic outlook is still worrisome, Emanuel said most of his clients are asking about an impending recession that doesn't mean there aren't opportunities in stocks during the second half of the year. In particular, Emmanuel said that companies with strong cash positions on their balance sheets are a good bet in this environment.

He said that if you throw off cash, you have a margin of safety. Emanuel, who recently cut his goal for the S&P 500 to 4,300 for the end of the year, noted that odds are going to be better in the second half. The S&P has a 4,300 target for the S&P, which represents a 14 percent gain from Thursday's close.

Julie Hyman is the co-anchor of Yahoo Finance Live, weekdays 9 am -- 11 am ET.