Market Call: Happy Second Birthday To The Young Bull!

The S&P 500's latest bull market turned two-years old on Saturday. It started on October 12, 2022. Sentiment was extremely bearish back then (chart). There were widespread fears of a recession caused by the tightening of monetary policy. Those fears lingered through October 4 of this year, when a stronger-than-expected employment report once again confirmed that the young bull correctly discounted that inflation would fall while the economy remained resilient. That's been our forecast since early 2022.

Since the latest bear market bottom, the S&P 500 is up 62.6% through Friday's close (chart). That's par for the course compared to the previous eight bull markets. In our Roaring 2020s scenario, the S&P 500 reaches 8000 by the end of the decade mostly led by rising earnings rather than rising valuation multiples.