Following Apple's market value exceeding the trillion dollar mark, the US stock market has another new record. As of the close of August 22 local time, the bull market in the US stock market lasted 3,453 days, setting a record. The last round of economic crisis has led to a growing recovery in the past decade. Against this background, ultra-loose monetary policy is equipped with the birth of a new economic model, promoting the formation of a new round of bull market in the US stock market. However, under the uncertainty brought about by the escalating trade frictions, the continuation of the US stock bull market may hit a huge question mark.
01
New record
Local time on August 22, the historic day of the US stock market was a little calm. The Nasdaq index was boosted by the rise of technology stocks , with the S&P 500 index basically the same as the Dow Jones Index, slightly down 0.04% and 0.34% respectively.
Previously, the record for the longest bull market in the history of the S&P 500 was 3452 days, and after this day, the record was refreshed. Since March 9, 2009, the bull market cycle of the US stock market has lasted for 113 months, with a cumulative number of days reaching 3,453 days. During this period, the credit rating of the United States was downgraded in 2011, the euro zone experienced repeated collapse crises, and international oil prices plummeted all the way, while the US stock market withstood these panic shocks, and the S&P 500 fell by no more than 20%.
On the afternoon of the same day, US President Trump posted a Twitter congratulations on this. Although in the nearly one and a half years since Trump took office, the S&P 500 rose by only 26%, from 2271 points to 2863 points. During the eight-year term of former US President Obama, the S&P 500 index rose 235.7%, from 676 points to 2271 points.
However, there are still differences in the industry regarding the definition of bull markets and bear markets. Some analysts believe that the last bull market began in 1990. Between July and October of this year, the S&P 500 fell 19.92%, and was recognized as a bear market by the market. Some investors believe that compared with the 20% drop, the plunge in 1990 is just a "deep correction", and the start of the last bull market should be after the collapse of Wall Street in October 1987. Based on this calculation, the previous bull market cycle lasted 4494 days. Although
has the longest controversy in history, the rise in U.S. stocks in the past decade cannot be questioned. During this cycle, the S&P 500 has risen by 318.77%. During the same period, the Dow Jones Industrial Average rose 288.32%, while the Nasdaq rose as high as 509.74%. In early August this year, Apple's stock price hit a record high of US$207.05 during the session, and the market successfully exceeded US$1 trillion, becoming the world's first company to exceed US$1 trillion in a single market.
Yingda Securities Chief economist Li Daxiao told Beijing Business Daily reporters that compared with the previous round of bull market driven by the Internet bubble, the rise in the US stock market this time is supported by the improvement of efficiency driven by the new economic model and is supported by performance.
02
Technology stocks lead
In this round of US stock bull market, technology stocks have always played an important role. Currently, the five most valuable components in the S&P 500 index are technology stocks, namely Apple, Amazon , Google , Microsoft and Facebook . In March this year, the market value of these five companies has accounted for 15% of the S&P 500 index, accounting for more than all financial stocks, health care stocks or industrial stocks. Bank of America Merrill Lynch pointed out that technology stocks contributed 98% to the S&P 500's gains in the first half of this year, and without technology stocks, the S&P 500's earnings in the first half of the year were negative.
. In terms of company contribution, Apple alone contributed 4.1% to the rise of the S&P 500, followed by Microsoft and JPMorgan Chase , respectively, contributing 2.37% and 1.95% respectively. According to data from this year to July 13, companies led by Amazon, Microsoft, Apple and Netflix contributed 70% to the rise of the S&P 500.
In Li Daxiao's view, the rise in technology stocks is one of the driving factors of the bull market in the US stock market. But from the perspective of the entire bull market cycle, the most basic thing is that the global economy, including the United States, is slowly recovering from the economic crisis. The second important reason is the abundant liquidity of global capital. Since last year, the Trump administration's $1.5 trillion tax cut measures have greatly increased the profits of American companies by more than 30%, causing a large amount of funds to flow back to the stock market.
Qianhai Kaiyuan chief economist Yang Delong further analyzed that the Federal Reserve implemented three rounds of quantitative easing, releasing a lot of liquidity to the market. The super-loose monetary policy successfully prevented debt defaults and deflation, giving birth to the longest bull market in history. Bank of America analysts said that in the decade after the outbreak of the economic crisis, major central banks around the world cut interest rates 705 times, releasing a $12.4 trillion "quantitative easing" and global interest rates fell to historical lows.
杨德龙还表示，美国的企业多数都是跨国企业，在全球获得利润，很多公司业绩不断地增长，通过股票回购等方式提高公司的每股收益，也带动了相关股价的上涨。
03
bull market is dark and cloudy
In fact, American industry insiders are not interested in the historical record set by this bull market. Joe Saluzzi, partner at the US stockbroker Themis Trading, admitted: "How long does it take is not something I am interested in. What is more interesting is that this may be the new high this year." On Tuesday, the S&P 500 hit its intraday highest point since the end of January.
can only be determined afterwards due to bull and bear markets. To determine that the S&P 500 is still in a bull market, it needs to surpass the record high set on January 26. Tuesday's highest point failed to break through the January 26 high.
"This potential high is very important," said Howard Silverblatt, an analyst at S&P Dow Jones Index Co., Ltd. in a research note. "If the index falls 20% before hitting a new high, we will go back and announce that the current bull market ended when it hits its high on January 26, 2018."
In addition, the drivers of the new record are also worrying. The company's own high repurchase rate is not ineffective. The repurchase scale of the United States in the current quarter was US$190 billion, a decrease from 200 billion in the first quarter, but the overall repurchase volume is expected to reach US$1 trillion in the future. In an interview with the media, Lapsorn, a stock strategist at Faxing, said, "Once executed, the increase in the quarterly repurchase of the United States will reach 50%, which means it will increase by $100 billion every quarter. Although the dividend payout ratio is still very high (included in repurchase), a large part of the increase comes from cash on the corporate balance sheet and selling liquid assets, and net liabilities are substantially rising."
At the same time, technology stocks leading the bull market have also been frequently hit recently. Affected by the data breach scandal, data protection policies in various countries have become stricter, and the user growth of Facebook and other companies has encountered bottlenecks, and some leading Internet companies are facing a turning point. Previously, after Facebook's financial report was released, the stock price plummeted by more than 20%, continuing to sound the alarm for the bull market.
Sun Jie, a researcher at the Institute of World Economics and Politics, Chinese Academy of Social Sciences, analyzed to Beijing Business Daily reporters that judging from the perspective of corporate profits and order quantity, the operations of American companies have not improved fundamentally. "This year's data is later than last year, but as the tariffs in the trade war gradually land, the impact on the US and global economy will gradually emerge."
In Sun Jie's view, the 4.1% month-on-month growth rate of the US economy in the second quarter of this year is not enough to indicate that the US economy has entered a period of rapid growth. "In fact, the economic growth rate of the United States in the first quarter was generally low, and from a year-on-year perspective, the growth rate in the second quarter was only 2.2%. After the effect of Trump's tax cuts weakened, the economic growth rate of the United States may reach its peak at the end of this year and early next year, and then begin to slow down."
. According to the latest survey conducted by Reuters on more than 100 economic analysts from August 13 to 21, it also shows that the US economy may lose momentum in the next few quarters, and the growth rate at the end of next year will be lower than half of the above level.
Li Daxiao pointed out that the duration of this bull market is full of variables, and the evaluation mark lies in the economic growth situation, which depends on how the Sino-US trade friction will be handled in the next step.
Yang Delong also proposed in his comment article that the " Buffett indicator" (market value GDP ratio) shows that the US stock market is now as high as 140%, and is in a higher risk position. Buffett has begun to reduce his holdings in US stocks. Bank of America Merrill Lynch's research report on August 17 also showed that the market is turning to a defensive model, and investors are withdrawing funds from US stocks, technology and financial stocks.
According to this, many investment banks currently expect that the end of this bull market will occur around 2020. According to the attitudes of Bank of America Merrill Lynch and Citigroup, they believe that they may reach their peak in 2019.
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