Bull Market Tests Nerves On Wall St.


Rarely has a bull market been so unloved. Since March 2009, the Standard & Poor’s 500 stock index has nearly quadrupled in value. This year, not only is the index up 15 percent, but it also seems to have stopped going down at all: October was the 12th straight month that the S.&P. has logged a positive return, the first time that has happened since 1935.

Yet in most conversations about the ever-rising stock market, brokers and investment advisers say, are dominated by the question of when it will all come to an end.

With the exception of President Trump, of course. On Saturday, in an interview on Air Force One, he once again took credit for the market’s most recent record close on Friday.

Generally, this far into a bull market, euphoria kicks in. In 1929, shoeshine boys were doling out stock tips. In 1999, people were quitting their jobs to trade technology stocks from their living rooms.

These days, each successive stock market record seems to spur more hand-wringing than cheerleading. There is anxiety about overhyped shares, about the possibility of central banks withdrawing their support for global economies, even about markets simply being worryingly quiescent, as evidenced by the historically low readings of the volatility index known as the VIX.

”The VIX is too low, valuations are too high, the recovery is too old and the Fed is tightening,” said Jim Paulsen, a veteran market strategist for the Leuthold Group in Minnesota. ”For an old market dude like me, that is a scary list.”

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For several years now, Mr. Paulsen has been pleading with his clients to embrace the bull market. He has touted the breadth of the surge, in which no single sector has dramatically outrun another on the way up. And he has argued that worldwide growth with little inflation represents an unusual buying opportunity.

When he meets with clients or presents his views at conferences, though, the vast majority of the questions he receives are about what will ultimately bring the market crashing down.

”No one ever asks me when the S.&P. is going to blow past 3,000,” he said of the benchmark stock index which ended trading on Friday at 2,587.84.

In fact, many analysts say that this so-called wall of worry is a positive sign. Investors may be piling into stocks and bonds, the thinking goes, but they are doing it with a measure of hesitation, which prevents some of the excesses that preceded previous market corrections.

That is not to say the market is without froth.

Since early 2009, the market capitalizations of Amazon and Apple, have soared from $26 billion and $74 billion to $532 billion and $872 billion.

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