Happy birthday bull market!
Nasdaq off ~0.2%, S&P 500, Dow both down ~0.4%
Real estate weakest S&P sector; Energy sole gainers
Dollar ticks up; gold gains; crude rallies ~4%; bitcoin off >1%
U.S. 10-Year Treasury yield edges up to ~4.09%
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HAPPY BIRTHDAY BULL MARKET!
In two days, the benchmark S&P 500 index .SPX will mark two years since its October 12, 2022 bear-market closing low. At that time back then, bullish investors took the helm of the market in what has been a turbulent ride.
A bull market is only confirmed in hindsight, and on January 19 of this year, the S&P 500 finally surpassed what had been its record closing high hit on January 3, 2022.
As of Wednesday's intraday peak, the benchmark index had risen as much as 66% from its October 2022 intraday low, with Wall Street's 'Magnificent Seven' megacaps leading much of the rally. In comparison, the S&P 500 equally-weighted index .SPXEW gained about 44% from its October 2022 intraday low to its late-September record intraday high.
Over the past two years, markets have traversed through inflation (CPI) rising to multi-decade highs, the Federal Reserve's consequent interest rate hikes, on-going war in Ukraine, a war in the Middle East, fears of a recession, euphoria around artificial intelligence and now the phase of the Fed's monetary policy easing.
"For some cultures, cotton is a traditional gift for a second anniversary present due to its strength, comfort, and resilience, and for investors this bull market certainly delivered those qualities gift wrapped with a bow," said Adam Turnquist, Chief Technical Strategist for LPL Financial.
Where to from here?
Well, Turnquist said most bull markets taper off after the third year and that if the present one continues, annualized returns are most likely to be positive, but more muted.
The benchmark index is trading at about 28.55x, just shy of record high price to earnings valuations and compared with 18.42x two years ago.
Brokerages are still bullish on the index with UBS Global Research being the latest to raise its 2025 target for the index to 6,400 - an about 10% upside to current levels. UBS' target for 2026 is 6,850 - nearly 20% above current levels.
However, the road ahead is a rocky one lined with third-quarter earnings, U.S. elections, two ongoing conflicts involving nuclear powers and risks of a recession still not completely out of the picture.
(Johann M Cherian)
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FOR THURSDAY'S EARLIER LIVE MARKETS POSTS:
DIVIDEND OUTLAY FOG MAY LIFT AFTER ELECTIONS - CLICK HERE
SEPTEMBER INSIDER SELLING HITS HIGHEST LEVEL SINCE MARCH - CLICK HERE
THE MAIN EVENT: CPI VS JOBLESS CLAIMS - CLICK HERE
U.S. STOCKS DIP AFTER DATA - CLICK HERE
WHAT 2025 MEANS FOR THE S&P 500 INDEX - CLICK HERE
U.S. STOCK FUTURES MODESTLY RED AFTER HOT CPI - CLICK HERE
NAVIGATING THE WIND: EUROPEAN TURBINE MAKERS BRACE FOR BLOWS FROM THE EAST - CLICK HERE
"IT'S TOUGH OUT THERE IN THE NON-AI SEMIS WORLD" - CLICK HERE
FED RATE CUTS NOT ENOUGH TO SHIFT FROM CASH TO EQUITIES- CLICK HERE
OIL PRICES COULD REACH $90/BBL IF MIDDLE EAST CONFLICT HITS SUPPLIES - CLICK HERE
EUROPEAN SHARES MOSTLY LOWER; MARKETS AWAIT US CPI - CLICK HERE
EUROPE FUTURES EDGE LOWER AS US CPI LOOMS - CLICK HERE
CHINA STOCKS PARTY RESUMES WITH AN EYE ON SATURDAY - CLICK HERE
S&P 500 price to earnings ratio over the past two years https://tmsnrt.rs/48467Lo
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