The bull market, which kicked off on October 12, 2022, has now reached its two-year milestone and continues to flourish, defying expectations and maintaining robust momentum. Historically, bull markets have lasted an average of five and a half years since 1950, with gains typically reaching 190%.
As we commemorate this significant anniversary, investors are keenly observing whether the current rally will follow historical patterns or carve its own path. This sustained upward trajectory underscores the market’s resilience, despite economic challenges and shifting global dynamics, and leaves market participants speculating about future gains.
Based on History, the Bull Market Still Has Some Years to Run
Within the , there are just over 70 companies that have rallied more than 100% and only 71 have fallen.
The S&P 500 stocks that have risen the most are:
- NVIDIA (NASDAQ:) 1,091%.
- Super Micro Computer (NASDAQ:) 748.47%.
- Vistra (NYSE:) 485%.
- Palantir Technologies (NYSE:) 440%
- Fair Isaac (NYSE:) 401.50%
- General Electric (NYSE:) 375%
- Meta Platforms (NASDAQ:) 363%
Those that fell the most are:
- Walgreens Boots Alliance (NASDAQ:) -66.9%
- Dollar General (NYSE:) -66%
- Albemarle (NYSE:) -60%
- Enphase Energy (NASDAQ:) -60%
- Moderna (NASDAQ:) -56%
- Estee Lauder (NYSE:) -56%
- Dollar Tree (NASDAQ:) -51%
History and Dow Jones Favor Democrats
A strong market rally before an election can significantly boost the incumbent party’s chances of winning. Historically, when the gains more than 10% between January 1 and October 15 during an election year, the sitting party has a 78% probability of retaining power. This pattern underscores the connection between economic confidence and electoral outcomes.
Year to date, the Dow Jones surged by 13.4% as of October 15, suggesting a potential edge for the Democrats.
Such a robust market performance could reflect investor optimism and economic stability, factors that typically favor the party currently holding office. As the election approaches, these financial indicators might play a crucial role in shaping voter sentiment and the eventual outcome.
Nvidia’s Highs and Regrets
Nvidia continues to be a favorite among investors, with an impressive performance over the past two years.
The stock has a significant weighting in major indexes, including a 4.5% share in the , which is substantial as it indicates Nvidia holds more weight than all stocks from major countries like Germany and France.
No wonder Nvidia has been called the most relevant company in the world, apart from its market capitalization.
Recently, Nvidia’s CEO and CFO sold substantial portions of their shares, not due to a belief that the uptrend is ending, but to realize cash and capitalize on gains, while still retaining a significant number of shares.
On the other hand, there are people who regret having sold, for example, the investor Stanley Druckenmiller who recognizes that selling his position in Nvidia was a big mistake.
It recently returned to new all-time highs following Taiwan Semiconductor Manufacturing (NYSE:) results that exceeded market expectations confirming the growing demand for chips focused on artificial intelligence.
On Nov. 14, it will be Nvidia’s turn for its accounts and it expects revenues of $32.9 billion and earnings per share of $0.74.
After rising 16% in the last month, it is at the close of the week 250% above the lows of almost a year ago on October 26, 2023.
Two catalysts in its favor to maintain its uptrend are:
- Its ability to innovate not only in terms of chips, especially in terms of data centers and software offerings.
- Its strong market positioning to capture demand in the artificial intelligence and cloud computing sectors.
Stock Market Rankings in 2024
- 23.18%
- S&P 500 22.89%
- Spanish 18.05%
- German 17.35%
- Japanese 16.49%
- Italian 15.90%
- Dow Jones 14.74
- 14.40%
- 10,28%
- British 8.08%
- French 0.93
Investor sentiment (AAII)
Bullish sentiment, i.e., the expectation that stock prices will rise over the next six months, has dropped to 45.5%, still above the historical average of 37.5%.
Meanwhile, bearish sentiment, i.e., expectations that stock prices will fall over the next six months, has risen to 25.4%, yet remains below the historical average of 31%.
***
Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple perspectives and is highly risky and therefore, any investment decision and the associated risk remains with the investor.