It’s been exactly six years since the the S&P 500 hit an intraday low of 666.79 on March 6, 2009.
The S&P 500 opened on Friday at 2,100.91, a remarkable 215% gain. It’s just off its all-time high of 2,119.59 (Feb. 25).
“Only three [bull markets] since World War II have lasted this long,” S&P Capital IQ’s Sam Stovall said.
“Can we make it ’til year 7?” Stovall asks. “Earnings per share growth may help since this year’s 7.7% rise is consistent with the long-term average for year six, and earnings per share growth was 11% in year seven. Interest rates remain accommodative with the yield on the 10-year note currently well below the average of 4.7% at year six, making the yield curve is the steepest it’s ever been at this point in the cycle. Finally, the rule of 20, which sums the P/E with the CPI is currently below 19 versus 22 at bull market tops since 1948, implying that stocks are not overpriced.”
But that’s obviously no guarantee of more riches.
“This is one of the few times in which history might not be a good guide — we know it’s never gospel — due to the limited number of seventh year observations,” Stovall said. “It might be wise to ignore prior observations and proceed with caution.”