Money market bull market?
The S&P 500's feverish late-year rally has brought the index to its highest closing level of 2023, leaving it just 4.2% away from the all-time peak reached in January 2022. A close above 4,796.56 on the S&P 500 would confirm that the index has been in a bull market since bottoming out on Oct.
The S&P 500's feverish late-year rally has brought the index to its highest closing level of 2023, leaving it just 4.2% away from the all-time peak reached in January 2022. A close above 4,796.56 on the S&P 500 would confirm that the index has been in a bull market since bottoming out on Oct.
A bull market is the condition of a financial market in which prices are rising or are expected to rise. The term "bull market" is most often used to refer to the stock market but can be applied to anything that is traded, such as bonds, real estate, currencies, and commodities.
The benchmark's close confirmed that the S&P 500 has been in a bull market since it closed at its low on Oct. 12, 2022, according to one measure which also puts that date as the end of a bear market.
A bull market is when stock prices are on the rise and economically sound, while a bear market is when prices are in decline. The origin of these expressions is unclear, but one reason could be that bulls attack by bringing their horns upward, while bears attack by swiping their paws downward.
Main Street Research's James Demmert agreed with similar language, stating, "Tech should continue to be in a very vibrant bull market in 2024, but it is one that will broaden out across the sector, and not just be confined to the top names."
This skepticism is just one reason we think the bull market will march on in 2024, delivering a good-to-great year for global stocks.
The previous bull market lasted less than two years, starting in March 2020 and ending in January 2022. Before that, stocks were in a bull market that lasted nearly a decade, from March 2009 amid the Great Recession to February 2020, as Covid-19 emerged as a global threat.
The U.S. Securities and Exchange Commission defines a bull market as "a time when stock prices are rising and market sentiment is optimistic." More specifically, the SEC says a bull market tends to be marked by "a rise of 20% or more in a broad market index over at least a two-month period.
Investing in bull and bear markets
Having a higher allocation of stocks is optimal in a bull market, where there's more potential for higher returns. One way to capitalize on the rising prices of a bull market is to buy stocks early on and sell them before they reach their peak.
How often are we in a bull market?
Bear markets are the opposite phenomenon to bull markets. A bear market is a period when the S&P 500 pulls back 20% or more from its last all-time high. There have been 12 bull markets since the S&P 500 launched back in 1957, meaning a new one has started roughly once every 5.5 years.
Expect a 'bumpy landing' for the economy in 2024—and a 'very bullish' year for stocks, strategists say. No economist or market watcher has a crystal ball. So when it comes to making predictions for the year ahead, many take a conservative stance, making their bull or bear case with a litany of caveats.
The benchmark's close confirmed that the S&P 500 has been in a bull market since closing at its intraday low on Oct. 12, 2022, according to one measure. The index gained 24% last year despite fairly meagre profit growth - earnings are expected to have risen by just 2.8% for the whole of 2023, according to LSEG data.
And if you had invested $1,000 in Netflix a decade ago, it would have ballooned by more than 654% to $7,543 as of Oct.
"At the end of 2022, nearly every expert at the major banks predicted a recession and/or bear market in 2023. And yet, despite some volatility and selling over the summer, markets logged a largely positive year."
That tightening campaign would be expected to weigh on the economy, but the US has avoided a recession so far. The country's gross domestic product expanded 4.9% in the third quarter, for its highest growth rate in two years.
- Energy drink brand Celsius has grown revenue more than 20-fold since 2018.
- Strong demand for Hoka footwear is delivering superior returns for shares of Deckers Outdoor.
Bear markets tend to be short-lived.
The average length of a bear market is 289 days, or about 9.6 months. That's significantly shorter than the average length of a bull market, which is 965 days or 2.6 years. Every 3.5 years: That's the long-term average frequency between bear markets.
Stocks were in positive territory for much of 2023, closing the year with a solid rally in November and December. For all of 2023, the benchmark S&P 500 returned 26.29%. Markets demonstrated more volatility in the opening weeks of 2024.
With a few exceptions, the members of the 2024 Barron's Roundtable expect the stock market to disappoint, with the index delivering returns of minus-5% to plus-5% for the full year. No, they don't see a ruinous recession, and yes, they expect the Federal Reserve to lower interest rates at some point during the year.
Will the market rebound in 2024?
While many analysts think the market could well climb in 2024, they're not fully discounting the possibility of a downturn either. As with the start of 2023, market watchers remain divided on the state of the market in the year ahead, as so many variables work to confound predictions.
As a whole, analysts are optimistic about the outlook for stock prices in 2024. The consensus analyst price target for the S&P 500 is 5,090, suggesting roughly 8.5% upside from current levels.
It's OK to be a stock market bull on Wall Street again. After 2022 marked the worst year for markets since the Great Financial Crisis, consensus expectations for a recession in 2023 had many investors worried going into this year.
Bull markets often end with asset prices rising so fast and furiously that they end up in a bubble, with prices way out of connection with fundamentals. Asset prices may then fall as part of a market crash, an abrupt period of often just a few days when prices fall quickly.
In other words, in all but seven corrections in a 73-year time span, a stock market decline has taken longer than 10 months to reach its bottom. As of the closing bell on Jan. 4, 2023, the S&P 500 had spent 282 calendar days in a bear market, per Yardeni.
