As you’ve probably heard, stocks have managed to make new highs this week, a testament to just how deeply ingrained the BTFD mentality has become.
On Friday, the dollar and yields were priced as though the apocalypse was upon us and armageddon would take the form of a giant hurricane in the West and a mushroom cloud over Seoul in the East.
When both of those outcomes failed to materialize (in Irma’s case, the damage simply wasn’t as extensive as feared), investors had the green light.
“Not the apocalypse” is the new “all clear.”
Of course stocks have been saying something different than the dollar and bonds for months. It’s been a kind of can’t-lose affair for equities. Bonds are getting more expensive? Great, buy stocks. Yields are rising? Great, that must mean the reflation narrative that drove equities, yields, and the dollar higher in tandem post election is viable again.
Whatever the case, we thought it was worth mentioning that this week’s gains for U.S. equities make this the third strongest bull market in history. Here’s Bloomberg’s Lu Wang:
The elevation in U.S. stocks this week added a new credential to the ongoing bull market: third strongest ever.
While the S&P 500 Index’s rally has stalled just shy of 2,500, it’s sitting a hefty 269 percent higher than its March 2009 nadir, surpassing the 266 percent advance notched during the 1949 to 1956 bull market, data compiled by S&P Dow Jones Indices and Bloomberg show.
Something about “the bigger they are“… I forgot the rest.
I think it’s: “the bigger they are, the more aggressively you buy any dips.”