Yesterday the S&P500 officially registered its best bull market in history after World War II, besides the longest. Surprisingly, the crisis that could have led the world to financial Armageddon has resulted in a gain of over 450% in ten years, at an average of 45% per year, which is fantastic. Even more fabulous considering that in the last three quarters the results of the companies of the main share index have contracted, which has not occurred since 2016.
Interestingly, by May the S&P500 had risen by around 400 points and only about 150 from there to date, which gives the notion of the importance of stocks buybacks on Wall Street’s behaviour, since after the first quarter the money invested by companies in their shares fell sharply. But for the market level to stay where it is, with price earnings at 17.4, above the short and long-term average, investors are looking for a rebound in corporate earnings. Time will tell if this is going to happen or if we are already in a phase where smart money is already on the side-lines and is just an end of cycle fool’s run.
