Bull Market turns nine but still has its momentum in stocks
New York (Reuters): The bull market for stocks turns nine years old on Friday and, despite being long in the tooth, appears poised to set the record as the longest in history, buoyed by global economic growth and stronger company earnings.
It is unlikely to be a smooth ride, however, as investors have already had to endure a 10-percent market correction sparked by inflation concerns and heightened volatility, which is likely to continue throughout the year.
“Bull markets just don’t die of old age, they die of recessions and economic slowdowns,” said Art Hogan, chief market strategist at B. Riley FBR in New York.
The S&P 500 has more than quadrupled over that period—making its bull run, defined as a gain of 20% or more from a low point, the second longest in U.S. history. The Dow Jones Industrial Average is up 280%, while the Nasdaq Composite has surged 486% over that time.
Yet even as stocks have repeatedly defied investors’ expectations, the bull market has been called “unloved,” or even the “most hated rally ever,” reflecting investors’ widespread disdain for shares that look pricey, gridlock in Washington and—more recently—the threat of trade wars casting a shadow on corporate earnings growth.
“It’s going to be a hard slog, certainly compared to the previous nine years,” said John Velis, a macro strategist at State Street Global Markets. Still, Mr. Velis said, it is tough to argue that the end of the bull run is imminent.
While there are several risks to this current bull market, including the possibility of higher inflation and a trade war caused by President Donald Trump’s tariffs on aluminum and steel, most investors believe the current market isn’t at risk of falling into a bear market any time soon. Companies are benefiting from the recent tax law passed by Congress and the overall U.S. economy is growing and unemployment is at record lows.