The Bush Bull Market
Atlanta Journal-Constitution writer Tom Walker says this coming Thursday is the first birthday of the new bull market:
While nobody knows how long this bull will run, the stock market's steady rise for a full year since October 2002 settles the issue of whether the current rally is real or just another deceptive bear market bounce. To be sure, there are die-hard bears who still think the market is headed for lower lows than those recorded at this time last year. But they are a minority. Except for a nervous, pre-Iraqi war dip early in the year, the market's major averages have posted solid gains, especially since March when the war jitters ended. And if you've been out of the market over the last year - tough. Consider what you missed:
• As of Friday's close, the Dow Jones industrial average has risen 31.4 percent since Oct. 9, 2002.
• The Standard & Poor's 500 index is up 32.6 percent.
• And the technology-loaded Nasdaq composite index is up a stunning 68.8 percent.
Those gains rival historical norms, including the robust annual growth rates of the 1990s market boom.
The stock market recaptured $3 trillion in value of the $8.5 trillion that was lost between March 2000 and October 2002, according to the Wilshire 5000 index. And the rebound is worldwide. This means that, barring a calamity of epic proportions, the stock market will end its dreadful drought by posting positive numbers for calendar 2003, the first since 1999.
The story has lots more information about the strengthening economic recovery.
A couple of thoughts. First, the first year of the bear market was the year 2000 - the final year of the Clinton presidency, which can not be blamed on President Bush. Fact is, most of the stock market's collapse occurred during the Clinton presidency. Second, many of Bush's tax cuts began to take affect a year or so ago, just before the stock markets began to rise. So go ahead. Blame the Bush tax cuts! And third, this news won't be well received in the offices of the ten nine candidates currently running for the Democratic presidential nomination.
UPDATE: The Los Angeles Times also has noticed the bull market's one year anniversary:
As Wall Street nears the one-year anniversary of the long bear market's apparent demise, the bulls seem very much in control. "This market is just chewing through people who are still negative," said Ed Larsen, chief equity officer at AIM Capital Management Inc. in Houston.
Historically, after a deep slide in share prices a rise of 20% to 25% in major indexes over an extended period has qualified as a new bull market.
Call it the Bush Bull Market.
UPDATE 2: Speaking of the economy, Jeff Cornwall notes the contribution of entrepreneurs to economic growth, noting that "the Fortune 500 saw no real growth in employment even during the expansion of the 1990's." He's responding to comments by the Business Pundit about a Forbes article examining whether companies with Harvard MBA grads as their CEOs do better than firms without such leadership. Follow the links...
posted by Bill Hobbs, 10/7/2003 10:14:44 AM | 7 Comments | PERMALINK | HOME |
