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Stocks surge on strong economy

Wall Street ready to mark ‘longest bull run in history’

Wall Street traders were preparing to mark a new milestone on Wednesday when the S&P 500 is expected to post the longest bull run in history.

It hit another intra-day record, at 2872.87, on Tuesday as US stocks surge on the back of strong corporate results and healthy economic growth.

Investors also seem optimistic about the resumption of trade talks between Washington and Beijing.

Tom Stevenson, investment director for personal investing at Fidelity International, said: “If someone had said in March 2009 that we were setting out on the longest bull market investors have ever seen, they would have been laughed out of court.

“In the aftermath of the financial crisis triggered by the collapse of Lehman Brothers 10 years ago next month, investor sentiment was at its lowest ebb.”

The S&P 500’s bull market will be 3,453 days old on the 22nd, exceeding by one day the previous record rally from October 1990 until the bursting of the tech bubble in March 2000.

Wall Street’s gain of around 320% is still significantly less than the 417% recorded in the 1990s but it is still safely ahead of any previous post-war market rally in both size and duration. “

Mr Stevenson said: “Should investors worry that this new record brings us closer to the peak of the current cycle? Not necessarily.

“Bull markets do not die of old age; they die of fright. The length of a bull market is less important than the fundamentals of valuation and investor sentiment.

“On both counts it is reasonable to expect the US market to continue rising for a while yet. With earnings having been boosted by tax cuts, valuations are high but not excessively so.

“Meanwhile, this most unloved of all bull markets has left sentiment relatively subdued. The euphoria which typically marks the end of a bull market is notably absent this time. 

“Even the length of the bull market may be misleading. If you treat, the bear markets in 1987 and 1990 as painful corrections rather than real bear markets, you can easily see 1982-2000 as one long bull market.

“During that period, the S&P 500 rose from 102.4 to 1,527.5. By comparison, the recovery from the dark days of 2009 pales into insignificance.”

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