Good morning, investors. The US stock market is open today, while the bond market is closed in observance of Columbus Day (or Indigenous Peoples’ Day, depending on your home state).
For our purposes, we’re here to celebrate the bull market’s third birthday.
💡 Reader note: Our team loves hearing your feedback. We just updated our market snapshot to include the Magnificent 7, global equities, and silver. We’re also rolling out a new “On this day in history” section — all because you asked.
Let us know if there are any more updates you want to see.
Birthday bull
The S&P 500 bottomed on October 12, 2022 at 3,577.
Three years later and the index has climbed 83% and the bull market remains intact with more room to run.
That’s not even half the average 191% return of the prior 11 bull markets, according to Ryan Detrick of Carson Research.
History suggests three years is still “young” compared to the other bull runs.
There have been 11 other bull markets since World War II, and only once did a bull make it this far without reaching its fourth anniversary.
“Just remember, prior bulls that made it this far had many years left,” Detrick said.
While some Wall Street strategists point to elevated valuations and dot-com comparisons as reason to believe the rally will soon end, the AI trade continues to accelerate and recession fears have dwindled all year.
Unprecedented Big Tech strength, however, has created a narrow and top-heavy market.
The equal-weight S&P 500, for instance, has underperformed the traditional market-cap weighted benchmark over the last three years.
A few details on the performance gap:
A handful of mega-cap drive the market
Index-fund investors are increasingly concentrated
Breadth remains weak even as the index hits records
The average S&P 500 stock has seen modest returns
Depending how optimistically you view the data, you could see all of the above as a signal of resilience or fragility — resilience because the top is so strong, fragility because leadership is so narrow.
Broader economic factors like the Federal Reserve, disruptions in Washington, and geopolitical uncertainty have done little to discourage investors so far.
As far as the central bank, markets see multiple rate cuts heading into 2026.
The outlook remains paradoxical. Good news for the economy isn’t necessarily good news for stocks.
If the economy does get stronger, it could mean fewer rate cuts are needed and so dampen investor enthusiasm.
If growth slows, it could push policymakers to cut rates more than expected — which could push stocks higher.
“Something has to give,” said Seth Carpenter, chief global economist for Morgan Stanley.
“If the economy is strong, the market is expecting too many cuts, and if the economy is weak, earnings are likely not as good as hoped.”
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Market snapshot
Elsewhere
📈 Stocks are rebounding from Friday’s sell-off. Futures turned green after President Trump reversed course from his aggressive stance on China with a social post on Sunday saying “don’t worry” about China. (CNBC)
🏦 Big bank earnings are here. Analysts are bullish for the major firms’ results this week. JPMorgan, Citi, Goldman Sachs and Wells Fargo will report starting Tuesday. (Yahoo Finance)
🤖 OpenAI is dominating Silicon Valley like never before. The ChatGPT creator has partnerships with Nvidia, Broadcom, AMD, and Oracle as well as other smaller players, and it’s become one of the fastest-moving disrupter ever. (CNBC)
Rapid-fire
Options traders are preparing for the biggest price fluctuations from earnings since 2022 (Bloomberg)
Manhattan’s diamond district is seeing a rush of gold buyers (WSJ)
VP Vance says “fraud” is everywhere in the Affordable Care Act tax credits (CNBC)
Global policymakers are set to gather for the IMF meeting in Washington this week (Bloomberg)
Aging demographics will fuel this mid-cap healthcare stock to compound for years to come (Best Ideas Club)
The debasement trade is only accelerating (Pomp Letter)
A new survey found 10% of investors are dissatisfied with current 401(k) offerings (WSJ)
On this day
🗓 October 13, 1989: A “Friday the 13th” mini-crash led the Dow and S&P 500 to drop more than 6% each, tied to breakdown of a $6.75 billion buyout deal for UAL Corporation.
Last thing
About me
📰 I’m Phil Rosen, co-founder of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.
I write our flagship newsletter to prepare you for each trading day — unpacking markets, economic data and Wall Street with analysis you won’t find anywhere else.
Feedback? Reply to this email, ping me on X @philrosenn, or write me directly at [email protected].