It’s official: This is the longest ever US bull market – The Wall Street Journal

DUBLIN – It should come as no surprise that on Wednesday, this officially becomes the longest-ever bull market in US history. The US economy is thriving, unemployment is at previously unthinkable lows, yet inflation is well-contained. Despite massive levels of government and corporate debt, investors can't get enough of the dollar, of US Treasuries, and of US stocks. This bull market has been driven – to a remarkable degree – by a small handful of extraordinary companies. Tech giants like Google parent Alphabet, Facebook, Amazon, and Apple have been the locomotives driving the market upward. On the other hand, many sectors of the market have yet to recover their pre-crash levels. It is, in other words, a very uneven bull market, but an enduring and powerful one nonetheless. So, obviously, the question is: when will the crash come? It's impossible to say, of course, but it will come – Felicity Duncan.U.S. Stocks Poised to Enter Longest-Ever Bull Market.By Michael Wursthorn and Akane Otani.(The Wall Street Journal) U.S. stocks are on the verge of surpassing their longest-running rally, ratifying a market rebound that began in the ashes of the financial crisis and defying those who have questioned its staying power..___STEADY_PAYWALL___.Wednesday will mark 3,453 days since the S&P 500 hit its low of 666 on March 9, 2009. Since then, the broadest U.S. blue-chip index has more than quadrupled in price terms, outpacing most rival major indexes around the globe..On Tuesday, the S&P rose to its first intraday record since January, adding 0.6% to trade at 2871. The Dow industrials rose 116 points to 25875. Tuesday's intraday S&P record shows the U.S. stock advance remains intact after nearly seven months of mostly sideways trading, traders and analysts said..The latest leg of the bull run for the S&P has been driven by booming economic growth in the U.S., as well as renewed strength in quarterly corporate earnings. Investors have also bet that the global economy will continue to expand at a steady pace even amid turbulence in some emerging markets such as Turkey and Venezuela. The largest advances in recent months and years have been concentrated in the U.S. technology companies that have practically become synonymous with technical prowess and business dominance, notably Apple, Amazon.com and Google parent Alphabet..The gains, aided by the U.S. corporate tax cut in December, deliver a rebuttal to sceptics who have argued that everything from a slowdown in China's growth to rising U.S. interest rates to intensifying trade tensions would dash the market's run. In the view of many portfolio managers and others, the ruddy health of the U.S. tech industry and the broad strength of the domestic economy likely point to continued increases for stock prices in coming quarters, even if high valuations are likely to limit the scope of any rise.."Companies are tearing it up," said Don Townswick, director of equity strategies at Conning & Co. "It's quite possible to see the market continue to do well.".Few investors would have bet that the longest bull market in U.S. history would follow on the heels of the worst financial crisis to rock the world since the Great Depression. A decade ago, storied investment firms like Bear Stearns and Lehman Brothers Holdings disappeared while others including Merrill Lynch were sold under intense market pressure. Many analysts and investors believed in March 2009 that, even with broad market indexes down 40% and more from their peaks 18 months earlier, worse tidings were yet to come..Instead, the economy struggled back to its feet over a period of years. Investment flows inevitably shifted away from a hamstrung financial industry toward fast-growing, consumer-facing technology companies that were devising products that managed to change everything from the ways Americans shopped for clothes to how they communicated with one another. One investor favourite of the current rally, Facebook Inc., didn't enter public markets until 2012. Its shares are up nearly fivefold since its market debut..The current rally isn't the hottest. The previous record S&P bull market that ended with the tech bust in March 2000 rose 417% over 3,452 days—far above the current rally's 322%. The current run is the third-longest rally in the Dow Jones Industrial Average, after bull markets that ended in 1961 and 1929, according to Dow Jones Market Data..One test of the current bull market, investors and executives said, is whether popular tech companies will be able to continue to justify the massive sums invested in them amid intense competition, fickle consumer taste and Wall Street's notoriously imperfect efforts to predict broad trends..Companies in the S&P 500 technology sector make up 22% of the current bull market's return, according to S&P Dow Jones Indices, with Apple alone accounting for 4.1% of the gain. Four companies—Amazon, Microsoft Corp. , Apple and Netflix Inc.—account for 40% of the S&P 500's nearly 7% gain for the year, according to S&P Dow Jones Indices..Sceptics note that the leading shares in previous expansions, communications companies in 2000 and banks in 2008, fared poorly in the subsequent downdraft..What's more, with the Federal Reserve gradually raising interest rates and unwinding a decade of easy-money policies enacted after the crisis, many investors believe that shares trading at high price/earnings multiples—as many of the largest tech stocks are—will prove vulnerable to a reassessment of future return prospects..Yet many of the underpinnings of the so-called goldilocks period for stocks remain intact, with interest rates remaining low and inflation just touching the Fed's 2% target following a period of increases. Few economists expect a recession any time soon. As a result, even interest-rate sensitive investors aren't willing to call an end to the bull rally just yet.."Any time you have modest to good growth and modest inflation, you can worry about valuations," said Scott Wren, a senior global equity strategist at Wells Fargo Investment Institute. "But this expansion is going to continue for a while longer.".Some bulls find solace in a look back at some of the market's hard times since the crisis. Michael Batnick, director of research at Ritholtz Wealth Management, contends that the current bull run began in 2013—when the S&P 500 set its first record close since the financial crisis..Others argue that the current bull run was interrupted by steep slides in 2011, when the S&P 500 declines were just shy of an official bear market. Either way, investors say there is little use in trying to time the bull market's end.."Arbitrarily saying I need to take off risk because we're at the anniversary of the longest bull market is a suboptimal way of investing," said Mark Stoeckle, chief executive of the Adams Funds. "Markets can go up a lot longer than many people think they can.".Write to Michael Wursthorn at Michael.Wursthorn@wsj.com and Akane Otani at akane.otani@wsj.com

It’s official: This is the longest ever US bull market – The Wall Street Journal

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