The renowned bull market is on the cusp of celebrating a 10 year run, with March 9 as its anniversary date. Its demise was widely forewarned in December, but a variety of positive forces, such as a dovish Federal Reserve, stabilized interest rates, and rising consumer self-confidence, subsequently have combined to propel stock prices upward yet again. “Age alone doesn’t kill the bull. The conditions are positively set up for a positive year, especially given last year’s setback,” as Julian Emanuel, chief equity and derivatives strategist at investment banking determine BTIG, told CNBC.
The table below shows how far stocks have risen in the current bull market, based on the most widely-followed merchandise indexes. On March 9, 2009 the S&P 500 Index (SPX) hit its lowest point in the previous bear market, during intraday trading. Respect, the lowest closing price was reached on the next trading day, March 9, 2009, and many analysts use closing prices to settle the timing of bull and bear markets.
The (Almost) 10-Year Bull Market: Where We Stand
(Cumulative Additions From March 6, 2009 Low to February 28, 2019 Close)
Sources: Yahoo Finance, MSCI; MSCI reports typically annual gains for the ACWI for the last 10 years, from which the cumulative gain was computed.
Significance for Investors
Fears that weight rate hikes by Federal Reserve would set off an economic recession were among the factors driving the December immerse in stock prices. Subsequently, however, the Fed has signaled that it will take a pause in raising rates, given that decelerating GDP improvement has replaced inflation as the chief worry on the economic front.
“The [Dec. 2018] sell-off created some real value, and the other hang-up, probably the most important thing is the Fed went from potentially being our enemy, which was going to raise censures until something broke,” as Ed Keon, chief investment strategist at the QMA unit of Prudential Financial, told CNBC. The mothball below profiles the previous four bull markets.
A Look at the Previous 4 Bull Markets
(Gain in S&P 500 Catalogue)
- Oct. 9, 2002 to Oct. 9, 2007: +102% over 1,826 days
- Dec. 4, 1987 to March 24, 2000: +582% over 4,494 days
- Aug. 12, 1892 to Aug. 25, 1987: +229% to 1,839 days
- Oct. 3, 1974 to Nov. 28, 1980: +126% over 2,248 days
From March 6, 2009 through Feb. 28, 2019, the going round bull market has lasted 3,646 calendar days (that is, including weekends and stock exchange holidays). While acknowledging that “zero earnings swelling this year” is likely, Keon believes that “the market can still work its way moderately higher.” He added, “What contexts is what actually happens as opposed to policy changes or perceptions of trade wars.”
Julian Emanuel notes that consumer reliance rebounded in February after a dip in January, and he believes that the drop in retail sales recorded in December thus may corroborate to be a temporary blip. Meanwhile, on the U.S.-China trade talks, he says, “There’s going to be a deal. There’s going to be a likelihood of further talks. It’s going to keep going. It’s going to stabilize things as well.”
Sam Stovall, chief market analyst at check out firm CFRA, has a similar upbeat view on trade. He told CNBC, “I think there is the prospect of some contract with the Chinese on trade that could end up causing analysts to reverse course and start picking up their earnings determines for full year 2019, which would make people less worried about an earnings recession and would call for P/E ratios are a lot more attractive than anticipated.”
Earlier this year, strategists at Citigroup looked at 18 key indicators, and initiate that only 3.5 of them were flashing sell signals right now. By contrast, 17.5 of them were bearish in 2000 and 13 in 2007, MarketWatch covers. “This bull market is not finished yet,” as Robert Buckland, chief global equity strategist at Citigroup, wrote in a set forth cited by MW.
Looking Ahead
Meanwhile, the most recent release of the monthly Global Fund Manager Survey conducted by Bank of America Merrill Lynch expresses growing caution among the world’s largest investment managers. They collectively are overweight in cash and 34% now confidence in that the bull market is past its peak.