Markets: The ride’s not over yet
The bull market still has room to run, said Adam Shell in USA Today. The stock market’s long upward climb hit 3,453 days last week, a new record. The benchmark S&P 500 index has more than quadrupled since March 2009, without a major drop along the way. That makes some analysts think there has to be an “expiration date.” But this bull run has weathered many shocks, including a government shutdown and threats of nuclear war; predicting its end has been a “losing proposition.” There’s no “magical sell-by date” for bull markets, says Barry Ritholtz in Bloomberg.com. When you hear that the bull market is “aging,” it’s usually from someone who wants you to sell stocks and buy whatever it is they’re selling instead. The economy took a long time to recover from the “post-traumatic stress” caused by the Great Recession, which means further growth is possible.
Low interest rates and corporate tax cuts have certainly added “rocket fuel” to the stock market, said Steve LeVine in Axios.com. But the market remains “more subdued” than it was during the last long boom, in the 1990s. Economic historian Ken Rogoff says that eight years of this run was just digging out of the hole left by the financial crash. There’s still “forward momentum” in corporate profits and investor confidence. If the Fed keeps raising rates slowly, it “won’t hit the stock market all that hard.”
For those who want to invest in stocks, said Hugh Son in CNBC.com, there’s a “price war” among brokerages and advisers offering “increasingly competitive” deals. JPMorgan Chase, the biggest U.S. bank, introduced an investing app last week that offers 100 trades free in the first year—or permanently, if you keep $15,000 in Chase bank accounts. JPMorgan’s banking apps and website are already used by 47 million clients. The bank’s move, unabashedly inspired by Amazon, with its raft of services wrapped into Amazon Prime, could soon push other banks to offer free stock trading as part of their standard package of services.
Just because you can buy and sell stocks cheaply, though, doesn’t mean you should, said Ben Levisohn in Barrons.com. “Staying invested—not market timing—is the key to long-term success.” This bull market may not even really be the longest in history. Wall Street tradition says a bull market ends if stocks fall 20 percent from their peak. But brief declines, in 1961 when John F. Kennedy battled the steel industry, and on “Black Monday” in 1987, were just potholes in the road upward. Markets quickly made up their losses and resumed their climb. Taking that into account, U.S. bull markets really stretched all the way from 1949 to 1966, and from 1982 to 2000. “To reach those lengths, we still have a long way to go.”