Advertisement

SKIP ADVERTISEMENT

The Bull Market’s Greatest Feat? Sowing Doubt

This stock market rally hasn’t been as intense as many others that preceded it.

Intensity of each bull market

More intense

The darker the shading, the quicker it rose.*

3,000

S&P 500

1,000

Scale is logarithmic

to show comparable

percentage changes

2

3,652

days

1

+305%

4,494

days

100

+582%

5

1,839

days

+229%

10

3

The five

longest bull

markets

2,954

days

4

2,248

days

+263%

+126%

1

1930

1940

1950

1960

1970

1980

1990

2000

2010

Intensity of each bull market

More intense

The darker the shading, the quicker it rose.*

3,000

1,000

S&P 500

Scale is logarithmic to show

comparable percentage changes

3,652

days

1,826

days

+305%

100

+102%

4,494

days

+582%

1,839

days

+229%

10

2,248

days

The six longest

bull markets

2,954

days

+126%

+263%

1

1930

1940

1950

1960

1970

1980

1990

2000

2010

Intensity of each bull market

More intense

The darker the shading, the quicker it rose.*

3,000

1,000

S&P 500

Scale is logarithmic to show

comparable percentage changes

100

The six longest

bull markets

10

2,954

days

2,248

days

1,839

days

4,494

days

1,826

days

3,652

days

+263%

+126%

+229%

+582%

+102%

+305%

1

1930

1940

1950

1960

1970

1980

1990

2000

2010

*The duration of each bull market counts all calendar days. Intensity is measured by the percentage gain for each bull market divided by its number of calendar days. Data is through March 9.

Sources: MacroTrends; Yardeni Research; Thomson Reuters

By Karl Russell


Ten years ago, when the global financial crisis seemed at its worst, the stock market hit rock bottom.

The bull run that has followed now ranks among the greatest rallies of the past century: The S&P 500 has more than quadrupled, adding $17.5 trillion in value, and, of the 11 bull markets since the end of World War II, only the run that ended with the bursting of the dot-com bubble in 2000 tops the current one in duration and returns.

But despite the superlatives, this rally’s primary characteristic is how much skepticism it generated. The intensity of gains that defined the stock market bubbles of the 1920s and 1990s never developed. Instead, many investors spent the past decade deriding the rally and anticipating its demise.

Bull markets are usually driven by a strengthening economy that fuels corporate profits. But the economic scars of the downturn a decade ago were deep and the recovery slow.

For much of the past decade, economic growth remained lackluster; corporate earnings, at least until last year, were uninspiring; and the global economy bounced from one crisis to the next. There was the sovereign debt crisis that wracked the eurozone, concerns about the health of China’s economy and its growing debt load, tumbling oil prices that dragged down energy-sector profits, and, most recently, concerns about global economy and trade.

True, the bull market never succumbed to these worries (although it came awfully close more than once). Credit for that goes to the world’s central banks whose efforts to keep interest rates low made bond investments and other alternatives unappealing, and kept fueling the stock buying.

This is not to say that investors weren’t excited about some stocks. Investors piled into shares of Alphabet, Amazon, Apple and Microsoft and those four stock had a big effect on the S&P 500, particularly in the last few years.

Over the past decade, and factoring in dividends, the four biggest tech companies accounted for 9 percent of the gains in the S&P 500, according to data from Howard Silverblatt, senior index analyst for S&P Dow Jones Indices.

Top contributors to the bull market

Apple

1.

3.90

%

Microsoft

2.41

2.

JPMorgan Chase

3.

1.92

General Electric

4.

1.67

Wells Fargo

5.

1.52

Johnson & Johnson

6.

1.33

Amazon

7.

1.30

Exxon Mobil

8.

1.27

Share of the S&P

500’s total return,

which includes

dividends, over

the last decade

I.B.M.

9.

1.20

Chevron

10.

1.14

Pfizer

11.

1.12

Procter & Gamble

12.

1.12

AT&T

13.

1.09

Bank of America

14.

1.08

Intel

15.

1.02

Philip Morris

16.

0.95

Cisco Systems

17.

0.93

Home Depot

18.

0.91

Alphabet (Google)*

19.

0.90

Coca-Cola

20.

0.89

Top contributors to the bull market

1.

Apple

3.90

%

Microsoft

2.41

2.

3.

JPMorgan Chase

1.92

4.

General Electric

1.67

5.

Wells Fargo

1.52

6.

Johnson & Johnson

1.33

7.

Amazon

1.30

8.

Exxon Mobil

1.27

9.

I.B.M.

1.20

Share of the S&P 500’s

total return, which

includes dividends,

over the last decade

10.

Chevron

1.14

11.

Pfizer

1.12

12.

Procter & Gamble

1.12

13.

AT&T

1.09

14.

Bank of America

1.08

15.

Intel

1.02

16.

Philip Morris

0.95

17.

Cisco Systems

0.93

18.

Home Depot

0.91

19.

Alphabet (Google)*

0.90

20.

Coca-Cola

0.89

Data is through March 5. *Class A shares.

Source: S&P Dow Jones Indices

By Karl Russell

When it comes to actual performance of their shares, Alphabet and Microsoft gained more than 600 percent over the past decade, while Apple jumped nearly 1,400 percent and Amazon surged nearly 2,600 percent.

It wasn’t just the tech companies themselves that fared well. The best-performing bank stock over the past decade was SVB Financial, Silicon Valley’s so-called hometown bank, which rose almost 1,900 percent.

For all the attention paid to technology shares though, the honor of best-performing stock in the S&P 500 over the past decade actually goes to Ulta Beauty, the cosmetics retailer. Its shares have surged more than 7,000 percent.

A version of this article appears in print on  , Section B, Page 5 of the New York edition with the headline: Sowing Doubt For a Decade. Order Reprints | Today’s Paper | Subscribe

Advertisement

SKIP ADVERTISEMENT