Nov 13, 2019

The current bull market is actually below average

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Note: Duration is in months; Reproduced from LPL Financial; Table: Axios Visuals

The S&P 500's bull run over the past 128 months has been impressive, but it is also not well understood, analysts at LPL Financial note.

The intrigue: While the stock market's gains have continued longer than the previous record bull market that Americans witnessed through the 1990s, it has produced far fewer returns for stock investors.

Details: This bull market's average returns have not been as strong as during the last long run, and they are historically worse than the average bull market, delivering 15.3% average annualized gains compared to the average bull market annualized gain of 18.9%.

  • That's been largely because this bull market has experienced two separate 19% corrections in October 2011 and December 2018.

Reality check: "While the selloffs were swift and deep, the S&P 500 didn’t fall more than 20% on a closing basis (the classic definition of a 'bear market')," LPL analysts note.

  • "One more bad day last December, though, and we would be saying this bull market is less than a year old. That’s quite a different look than where we are now."

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Dow closes, hits 28K for the first time ever

Traders on the floor of the New York Stock Exchange (NYSE) on Nov. 15. Photo: Spencer Platt / Staff

The Dow Jones Industrial Average hit and closed above 28,000 for the first time ever on Friday, while the S&P 500 and Nasdaq Composite also closed at new records.

Why it matters: The 28,000 level has no relevance in and of itself, but the markets' new highs in recent weeks is a sign of investors' renewed confidence in the state of the U.S. economy.

Go deeperArrowNov 15, 2019

Traders keep selling stocks and stuffing cash into savings accounts

Data: Investment Company Institute; Chart: Andrew Witherspoon/Axios

The return of bullish sentiment that has driven the stock market to fresh all-time highs hasn't dented the safe-haven appeal of money market funds, which are akin to savings accounts or holding cash.

Why it matters: In fact, data shows investors are still selling equities on an overall basis and moving that money into money market funds.

Go deeperArrowDec 6, 2019

The market will need the Fed again in 2020

Illustration: Aïda Amer/Axios

The No.1 risk to the stock market continuing its outperformance next year is not President Trump or consistently weak U.S. economic data or even China, senior analysts at John Hancock Investment Management say, but whether or not the Fed continues to stimulate the economy through what they call "not QE."

What it means: Fed chair Jerome Powell has insisted the central bank's bond buying program — initiated after rates in the systemically important repo market spiked to five times their normal level in September — is not quantitative easing.