Good morning, investors. Big banks kick off third-quarter earnings season today, with JPMorgan, Goldman Sachs, Citigroup and Wells Fargo all set to report.
Before the results hit, we're looking at data behind the bull market milestone everyone’s talking about.
Birthday bull
It’s not every day a bull market starts its fifth year.
The S&P 500 has gained 118% since the current rally kicked off in October 2022. That is the third-best start to a bull market at its fourth birthday, according to an analysis from Ryan Detrick, chief market strategist at Carson Group.
Seven other bull markets have reached their fourth birthday in the last seven decades. Only two began with a bigger gain than this one.
Zooming out even more, bull markets have delivered a historical average of 192% dating back to 1950.
The 1987 to 2000 run gained 582%, while the 2009 to 2020 market returned 401%.
Those are full-cycle totals, which means the current rally could still be early in its own track record.
Chart courtesy of Exhibit A
“The last time we saw a bull market get past its third birthday and not make it to five was in the early 1960s,” Detrick said.
“In other words, over the past fifty years, if a bull made it this far, it made it to at least the fifth birthday, and the average ultimate length of the bull markets was eight years.”
The index is within 1% of its 52-week high and it’s climbed just over 17% since its third birthday a year ago.
On one hand, the tech-heavy and still-narrowing market — paired with uncertain geopolitics and elevated oil prices — has made investors nervous.
Yet at the same time, forward valuations have actually fallen, making many of the most popular names in the AI trade cheaper than a year ago.
The historical data ultimately points in one direction. Bulls that hit this milestone tend to keep running.
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Elsewhere
🏦 Goldman Sachs just turned bullish on global stocks again. The bank upgraded its three-month view on global equities to overweight from neutral and lifted its 12-month call on government bonds to overweight, saying bonds should "move from portfolio headwind to hedge." (Investing.com)
🤖 Microsoft is betting its AI future on homegrown chips. The company said its next-generation Maia 300 will become its main chip for running AI models, with 96 chips per rack and 40% more tokens per megawatt than GPUs when production starts in 2027. (CNBC)
🎯 Citigroup wants out from under its consent orders. The bank has been aiming to submit a comprehensive audit to the Fed and OCC, targeting year-end or the first quarter as recently as this summer, and CEO Jane Fraser has said it is about 90% done with the required work. (Investing.com)
📊 Options traders expect big swings from bank earnings. Implied moves range from 2.5% for JPMorgan to 3.5% for Wells Fargo, which is down 10% this year and has fallen after its last three reports. (CNBC)
Rapid-fire
Starbucks says it is not buying Chipotle after days of takeover speculation (CNBC)
US mortgage bond funds just saw one of their worst outflows since 2021 (Bloomberg)
Micron workers in Taiwan voted 99% in favor of strike action that could disrupt its DRAM output (Yahoo Finance)
Gas prices are set to break their record for most days above $4 a barrel (Yahoo Finance)
Fed’s Hammack says smaller, frequent rate adjustments are preferred (Bloomberg)
Buying the entire stock market is really just a narrow bet on tech dominance (Opening Bell Daily)
On this day
🗓 October 13, 2008: The Dow surged 936.42 points, or 11.08%, to 9,387.61 after the US and European governments unveiled plans to inject capital into banks, marking the index's biggest one-day point gain ever at the time.
Last thing
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