The run of gains on Wall Street turns 8 years old on Thursday (March 9) and, despite its advanced age, is expected to rage on, with perhaps a few hiccups, based on a combination of stronger company earnings, lower taxes and a corporate-friendly administration in Washington.
Strategists, however, warn that a correction of as much as 10 percent should be expected as the market is richly valued. The bull case for equities relies on analysts seeing little chance of recession in the short term.
“We are due to see some selling,” said Hilary Kramer, chief investment officer at A&G Capital in New York.
“It’s just a natural phenomenon when you look at the cycles of the market, which we always study, and we know that these eight years have been an extraordinary return for investors. So, the market sometimes has to has to restock and think through what it wants to do next. But, in reality, when it comes to the U.S. market versus other markets globally, the U.S. has been the flight to safety market. So, I think that that will bode well for us over the long term.”
The S&P 500 index has rallied 250 percent since hitting a closing low of 676.53 on March 9, 2009. The gains since, uninterrupted by a decline of 20 percent or more, rank this bull market as the second longest ever.
The current run is nearly three years older than the average bull and more than a year shorter than the longest one: the rally from October 11, 1990 to March 24, 2000.