The warnings keep coming, but the numbers keep stacking up. And on August 22nd – in just 9 days – the US stock market will break its record for the longest ever bull run. This is a run that started way back in 2009, born out of the ruins of the global financial crisis in 2008. Over the nine-plus ensuing years, the Nasdaq has gone up by 518%, the S&P 319%. Every year, the news runs stories on how “These key indicators” show that the run is going to end, but every year it marches relentlessly forward, showing no signs of losing the wind that powers its sails.
Perhaps the most amazing aspect of this particular run is that it seemingly brushes off adversity, like water off a duck’s back. Interest rates are rising, the political landscape is less than secure and there’s the small matter of a potential trade war with China – not to mention the global effects of Brexit. But then, the only way was up after 2008, and up is exactly where we’ve gone. GDP is accelerating at breakneck speed in this period of economic growth and earnings are up considerably, contributing to much larger waves of buying going on; and it’s Americans buying American too.
Of course, all good things must come to an end. Prominent investors are becoming increasingly wary of sell-offs and quantitative easing is slowing, which will inevitably reduce liquidity. However, JP Morgan believe that there could be another 2.5 years left in this particular bull run and the birth of the “trillion-dollar enterprise”, spearheaded by Apple and hotly pursued by Amazon, may spark even more growth in the short-term. One thing’s for sure though – the stock market has never been healthier, and the spring is well and truly back in the step of the US economy – for now at least.