We’re Now in the Longest Bull Market in History — Or Are We?
As the closing bell rang on the New York Stock Exchange yesterday, investors and others celebrated a milestone that carries with it a fairly impressive title: the longest bull market in history. In this case the bull market dates all the way back to March 9th, 2009, meaning the previous record set between October 1990 and March 2000 was vanquished on Wednesday, August 22nd. During these 3,453 days, as Quartz notes, the S&P has gained more than 320%. Despite the hullaballoo surrounding this achievement, there are those that argue the title is actually undeserved — and yet others that warn the bull’s run is coming to an end.
First, it’s important to understand what the “longest bull market in history” really means. MarketWatch explains that the current title is based on the fact that the market hasn’t dipped by 20% or more since it first gained 20%+ in March 2009 to kick off the bull market. While that’s fairly straightforward, some have taken issue with this definition and calculation, saying that markets are more nuanced than that. Similarly there are those who are saying “Hold the champagne!” when it comes to this perceived achievement.
One point of contention is that some say the bull market that made it into the new Millennium actually started earlier than 1990. Instead CFRA chief investment strategist Sam Stovall suggests the streak should have been counted from October 1987. The reason for the discrepancy is a 19.9% fall between July 1990 and October 1990 — just slightly below that 20% threshold. Stovall argues this constituted the “deepest of corrections, not a bear market.” Thus he concludes that the current market would need to stay on course until April 3rd, 2021 to truly take the crown.
The question then becomes, does the current market have the steam to make it that long? Gluskin Sheff chief economist and strategist David Rosenberg sure doesn’t seem to think so. In fact he too calls the record into question, telling CNBC, “Keep in context how weird it is to have the longest bull market in equities in the context of the weakest economic expansion of all time, and how do you square that circle? It’s because of the long arm of the central banks.” Rosenberg went on to say of the current market, “We are very late cycle. We are going to be renting the movie backwards.”
Regardless of the technicalities and specifics, a 9.5-year run is still an impressive feat. Whether the bull is nearing the end of its life is another story and it’s probably too early to pen that obituary just yet. After all the current market has managed to shake off a number of disruptions analysts thought would be bigger factors including political uncertainty, trade wars, and more. So although this bull surely can’t run forever, we’ll see just how much charge this record-breaker has left in it.