The US stock market, as measured by the S&P 500 Index, just reached a historic milestone.
On 22 August 2018, the index went 3,453 days without a correction of 20% or more.1 By that measure, it’s now generally regarded as the longest US equity bull market on record, surpassing the previous record bull run that lasted from October 1990 to March 2000.2 That record ended when the Dot-Com bubble burst, after valuations for tech stocks disconnected from earnings and reality.
Most observers generally cite 9 March 2009, as the start of the bull market. Since then, the S&P 500 Index has risen more than 300%, as the chart below shows.
As we mentioned in a previous article, the current bull market has shrugged off some notable corrections, defined as a decline of 10% or more.3 It’s weathered the beginning and end of US quantitative easing and crises in other parts of the world.
Even the selloff in early February of this year—when the S&P 500 Index saw its largest one-day percentage fall since 2011—didn’t lead to a longer correction. And as at mid-August 2018, the index hovered near the record high of 2,873 set on 26 January 2018.6
Meanwhile, some of our investment professionals have questioned how long the ageing bull market can go on, despite leading US economic indicators that continue to point to robust growth.
At Franklin Templeton, we’ve been investing in global markets for more than 65 years, across bull and bear markets alike. While nobody can predict when the current bull market will end, we focus on the long term.
As the chart below shows, US stocks, as well as other asset classes, have tended to rebound after several notable market events over the past 30 years.
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1. Source: S&P Dow Jones Indices, as at 22 August 2018. Stocks represented by the S&P 500 Index. Indices are unmanaged and one cannot directly invest in them. They do not include fees, expenses and sales charges. Past performance is not an indicator or guarantee of future performance. See www.franklintempletondatasources.com for additional data provider information.