Some market pundits will tell you this is the most hated bull market in history.
Everywhere, there are sceptics who have prepared a hundred reasons why the stock market shouldn’t be as high as it is. And when things start flashing red, they’ll tell you we’ve seen the top.
In recent days, volatility has spiked in the global markets. The S&P 500 is now down 2.8% from its all-time high of 1,709, which it hit just two weeks ago.
Once again, people are asking: Have we seen the top? Or is this just a hiccup as the market continues to climb the “wall of worry.”
For some perspective, Oppenheimer’s John Stoltzfus charted some of the big sell-offs we’ve seen since the March 2009 bottom. Here’s his commentary:
The S&P 500 more than doubled, rebounding some 150% from the low on March 9, 2009 through the end of July 2013. The market recovery has drawn on more than four years of unprecedented central bank action that has in our opinion effectively ―primed the well of a recovery process that has led to -15.99% restructured corporate balance sheets, a global bank rescue, a recovery in the U.S. housing market, increased +150.62% consumer sentiment and consumer spending, improvements in the job market, and resurgent auto sales.
The current 2.8% sell-off is nothing compared to the double-digit losses we saw earlier in this bull market.
Stoltzfus believes that these downward moves will be short-term.
“We would see a near-term pullback tied to profit taking and/or investor confusion as to when, what, and how much the Fed will “taper” as opportunity for rebalancing and adding to cyclical positions in existing portfolios,” said Stoltzfus in a note to clients this week.
“Our year-end target for the S&P 500 remains 1,730,” he said.
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