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The Longevity of Bull Runs


Investors benefit from bull runs, but the longer they go on, the more chatter emerges about whether they’re still sustainable.

Record Highs and Ongoing Rally

Although the S&P 500 is lower on Wednesday, the index closed at its third-highest level in history on Tuesday, and has logged 13 record closes in 2024 alone. That comes on top of 2023’s 24% rally.

Is the Momentum Sustainable?

Those big gains have left some investors nervous about how long the market can go without pulling back. However, Ned Davis Research Senior Portfolio Strategist Pat Tschosik argues that the S&P 500 can move even higher.

Analyzing Historical Data

The current bull run of 344 market days compares with an average of 694 days, on a historical basis going back to 1930, meaning the index could only be about halfway through the current rally.

Reasons for Optimism

Others have pointed to more fundamental reasons why the market can keep climbing, from investor sentiment to consensus growth expectations and stable economic data. Technical analysts also seem to support this, given January’s gains, and the history of strong returns during election years point to ongoing strength for the rally.

Looking at Charts

Tschosik notes that charts can be telling, because when a “company or index that is over 50% of the way through its average length of days without a 20% correction and is making new highs is often in a longer uptrend with upside potential.”

Component Companies Analysis

The S&P 500 qualifies here, but it’s not at an extreme. More interesting, he notes, are the 19 component companies of the index that have gone the longest without a 20% correction, going back to October 2020. This includes Travelers at the top with 992 days, and PepsiCo second with 990 days. Eli Lilly has had the shortest run at 834 days.

The Elite Club: Companies Weathering the Storm

The insurance industry is well-represented in the list of companies weathering the storm. Notable names such as Travelers, March & McLennan, Arthur J. Gallagher, Chubb, Globe Life, Everest Group, Arch Capital Group, and Hartford Financial Services Group stand firm among the top 19 resilient companies.

A Balancing Act: Resilience Amidst Corrections

Despite the challenges faced since 2020, all 19 companies have weathered at least a 15% correction. While the tech sector basked in the limelight post the Magnificent Seven era, a slight pullback in 2022 resulted in only one tech giant making it to the list – International Business Machines. With an impressive run spanning 836 days, IBM holds a spot right before the finale.

A Record in Reach: IBM’s Triumph

IBM’s journey marks its fourth-longest run, nearing its record-breaking 1,083-day run that concluded in 2013. Focused on shedding non-core businesses to sharpen its portfolio in cloud and artificial intelligence, IBM’s vigorous strides are poised to break records sans a 20% correction.

Peaks and Valleys: The Nasdaq’s Odyssey

In contrast, while IBM surged to an 11-year high driven by its AI division, the Nasdaq Composite struggles to reclaim its pinnacle. The scuffle continues as it lingers 0.14% below its record close post November 19, 2021.

The Unwavering Cycle: Embracing Market Fluctuations

While no stocks or indexes ascend perpetually, historical patterns reveal that breakthroughs often follow deep corrections. Acknowledging that every winning streak has its limits, these enduring companies illuminate the essence of resilience amidst market turbulence.


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