Elementary, My Dear Investors! S&P 500 Charges to New Heights!

A Bull Market's Curious Case

The game my dear Watson is afoot! Or rather a bull! The S&P 500 that most peculiar of indices has pranced its way to a new record high. Since October 12 2022—a date that shall now live in infamy or at least in financial history—this bull market has galloped ahead for 989 days a veritable marathon for the monetary minded. As I always say "Data! Data! Data! I can't make bricks without clay!" and the data here is quite compelling.

Near Death Experience: A Close Shave with a Bear

However let us not forget the near fatal plunge! On April 8 the S&P 500 teetered precariously a mere 19.8% below its previous peak. Had it dipped just a hair further—a mere 0.2% to be precise—the bull would have breathed its last replaced by the dreaded bear. A truly elementary brush with disaster wouldn't you agree? "It has long been an axiom of mine that the little things are infinitely the most important."

The Remarkable Resurrection

Yet like a phoenix from the ashes (or perhaps more accurately like a share from a slump) it rebounded with unusual vigor. Frank Gretz of Wellington Shields aptly described it as a "remarkable recovery." Indeed the market's resilience is a testament to its inherent if somewhat baffling strength. One might even say “the world is full of obvious things which nobody by any chance ever observes.” Except of course yours truly.

Climbing Higher: Breadth and Parker Hannifin

The breadth of this recent ascent is noteworthy. The number of stocks participating coupled with the success of economically sensitive companies like Parker Hannifin suggests that this bull may yet have room to roam. It's a clue Watson a most intriguing clue! As I've often remarked “There is nothing more deceptive than an obvious fact.” And the fact is the market's internals look surprisingly robust.

Clouds on the Horizon: Tariffs and the Fed

Of course no investigation is complete without a thorough examination of the lurking shadows. Tariffs and the Federal Reserve's interest rate policy continue to cast a pall over the market's prospects. UBS global wealth management maintains a neutral stance a rather tepid endorsement wouldn't you say? But their David Lefkowitz offers a glimmer of hope suggesting that growth and inflation may improve later in the year. “You see but you do not observe. The distinction is clear.” One must remain vigilant.

The Icing on the Cake: Fed Rate Cuts?

The true prize the "icing on the cake," as Lefkowitz puts it would be a resumption of Fed rate cuts. Such a move could provide the market with the extra boost it needs to continue its upward trajectory. But as always we must tread carefully. For as I have learned time and again in my investigations “It is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories instead of theories to suit facts.” The game continues!