S&P Breaks Out To New Highs, One For The Record Books
Stocks rallied again yesterday, with the S&P finally breaking out to new all-time highs after recovering from their correction earlier this year. The Russell 2000 also broke out to new all-time highs (again) as well. I should note that both the Russell and the Nasdaq have made multiple new highs since their corrections earlier this year. The Dow still has some catching up to do. But it was a great day all around.
The big thing everybody was talking about yesterday was the S&P tying for the longest bull market in history. (That 'record' will be broken today.)
As you know I'm a huge bull and expect this market to keep on going for many, many years to come.
But I don't consider this bull market to be the longest bull market just yet. Only the second longest. Currently it's 9 years and 5 months old. But the oldest bull market which began in December 1987 and ran until March 2000 lasted for 12 years and 4 months. I'm using the lowest close in December 1987 of 223.91 to the highest close in March 2000 of 1,527.57 (which translates to a 582.23% gain).
Some mistakenly cut that bull run short because of the pullback we saw in 1990. If one were to look at the pullback from the high in 7/90 to the low in 10/90, it would've come down -20.36%, ending that bull market. But if you use the highest close in 7/90 to the lowest close in 10/90, the pullback falls just shy of that 20% mark at -19.92%, thus keeping the bull market alive. And rightly so.
Actually, we should probably call that move the longest bull run. Why? Because a bull market per se' doesn't officially start until there's a 20% rally. So technically, the market didn't rally 20% from the 12/87 low close until March 1988. So really, the clock should begin from there and go until there's a 20% pullback (the official end of a bull market and beginning of a bear), which didn't take place until March 2001. That technically makes the longest bull market 13 years long.
But for the sake of easy measuring, which also corresponds to a simple eyeballing of a chart, let's use the lowest close to the highest close as our bull run/bull market measurement, which makes 12 years and 4 months the record.
So yesterday's milestone of 9 years and 5 months for this bull market is crazy impressive, but is still only the 2nd longest bull market in history.
But in 2 years and 11 months from now (July 2021), I'm confident we'll be celebrating the real all-time record for the longest bull market in history.
And quite frankly, given how the economy is surging along with record employment, record corporate profits, and record consumer sentiment, due to the record tax cuts, and record deregulation, I'm feeling pretty good that we'll see this bull market set an even bigger record from there.
So whatever you do, don't miss out. Make sure you're taking full advantage of it.
This is history in the making. And truly one for the record books, no matter how you slice it!
See you tomorrow,
Kevin Matras
Executive Vice President, Zacks Investment Research
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