S&P 500 
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Wall Street has always labeled major stock market phases as "bear markets" - a falling market symbolized by a bear - or a “bull market” - a rising market symbolized by a bull.
The market commonly believes that a "bear market" starts when a market decline reaches or exceeds 20% from previous highs. In the absence of such an event, the market is bullish. This is the case with the S&P 500. On March 9, 2009, it was hitting a low since 1996 to 676.53 points. At the opening of the market on August 22, it reached 2,862. The longest bull market before that lasted from October 11, 1990 to March 24, 2000 - or 3452 days (9 years, 5 months and 13 days).
The market commonly believes that a "bear market" starts when a market decline reaches or exceeds 20% from previous highs. In the absence of such an event, the market is bullish. This is the case with the S&P 500. On March 9, 2009, it was hitting a low since 1996 to 676.53 points. At the opening of the market on August 22, it reached 2,862. The longest bull market before that lasted from October 11, 1990 to March 24, 2000 - or 3452 days (9 years, 5 months and 13 days).
The lenght of bull markets since 1970 (Source DWS)
After more than nine years, the question of the life expectancy of such a bull market naturally arises. When will it end ? Could another crisis be looming?
In the current context marred by a trade war and many uncertainties related to emerging markets, one could easily think that the next crisis is over the corner. However, the global financial market is in a much better shape and is better prepared to manage shocks than in 2008 - before the subprime crisis - with lots of corporate cash and stronger banks.
On the other hand, Jeffrey Kleintop, an analyst at Charles Swab, believes that we should not look to the past to foresee signs of a crisis. In a new note, he says that there are some reasons to think that the probability of a repeat of past crisis such as the subprimes in 2008 or the Asian financial crisis in 1997 has eased. But he warns investors about new vulnerabilities, such as high debt levels, political fragmentation, dependence on international sales, little fiscal or monetary policy ammunition, and the rise of passive investments.
“Market watchers tend to look for the signs that in the past signaled a shock was developing into a crisis. Vulnerabilities have shifted which may make the shocks that pose the greatest risk of a crisis somewhat different than those of the past.” A particular risk he highlights is the one posed by a shock from higher interest rates coupled with a stronger U.S. dollar.
No one knows how long the bull market will last. Actually, it may well last for quite a while. But we should always be prepared for what comes next, knowing that the next crisis may not resemble anything we’ve seen before.
“Market watchers tend to look for the signs that in the past signaled a shock was developing into a crisis. Vulnerabilities have shifted which may make the shocks that pose the greatest risk of a crisis somewhat different than those of the past.” A particular risk he highlights is the one posed by a shock from higher interest rates coupled with a stronger U.S. dollar.
No one knows how long the bull market will last. Actually, it may well last for quite a while. But we should always be prepared for what comes next, knowing that the next crisis may not resemble anything we’ve seen before.
