Wednesday marked the longest bull market in stock market history. The S&P 500 bottomed out on March 9, 2009 at 666.79 and has more than quadrupled over the past decade. This run-up exceeds the previous record set by the bull market of the 1990’s.
The length of this move has not always been easy. The market has been choppy at times, and sailing has not always been smooth. There have been multiple 5 ”“ 10% corrections along the way. But there has not been a full bear market at any point in that time, which is defined as more than a 20% drop from the previous market highs. Thus, the bull market has technically been in tact the last 10 years.
Here is a monthly chart of the S&P 500 going back to 1990. You can see the 2008 crash in the middle of this chart taken from Investors Business Daily, followed by the current bull market movement.
To be sure, this booming stock market has not always been reflected in the broader economy or in people’s workplaces, despite the media praise during the Obama years. Unemployment and underemployment has only recently improved in the last few years, and wage growth has remained stubbornly weak.
Here are weekly charts of the current NASDAQ and S&P 500 charts, showing their proximity to all-time highs.
Usually, bear markets are preceded by weakness in the market and leading stocks as they fall off from the old highs. In contrast, this current market seems to continually rebound despite temporary hiccups brought on by fears over Fed rate hikes and trade wars.
Also, news headlines typically blare about the power of the economy and imperviousness of the market before the market tops out and begins its fall from grace. The recent headlines have not been so positive – the fear in the media of a looming recession being chief among them. Though it is counter-intuitive, this public nervousness could actually indicate further room for the stock market to grow. It may mean there is still money sitting on the sidelines that hasn’t gotten into the game yet that could boost the indices higher. Only time will truly tell though.
That doesn’t mean to wildly throw money at the market. As with all investments, caution is always prudent.
A new bear market will start eventually. Nothing can go up forever. Perhaps the Federal Reserve will raise interest rates too much. Or maybe Trump will overreach on the trade war. But today’s milestone alone doesn’t mean that a crash is just around the corner.
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