519 Days: Kopin Tan on the State of the Rally

Kopin Tan is killing it week after week on the Barron’s Streetwise column he took over from the virtually irreplaceable Michael Santoli, who had been penning it from 2007 til 2012 when he jumped to Yahoo Finance. Tan’s really come into his own in recent weeks, I thought this weekend’s State of the Rally rundown was especially well done:

For 519 sessions, the U.S. stock market has run up without as much as a 10% correction, overcoming government dysfunction, mutinous interest rates, serial sightings of a Chinese hard landing, global warming, three Kardashian breakups (Kim, Khloe, and Kris) and Maria Sharapova’s shrieking, all the while transforming America into a beacon for investors the world over.

Just how long can it last, and when might it end?

Lately, the emerging consensus is that the rally might go for quite a while, and the smart thing is to guard against a premature evacuation of this bull run. After all, the global economy is chugging along, U.S. fiscal drag is waning, and S&P 500 companies are reporting third-quarter profit growth of 7.4% and revenue expansion of 4.3%. Misbehaving interest rates are now behaving as the 10-year Treasury yield retreats to 2.5%, commodity costs are cooperating, and even crude oil has slipped below its 200-day average in time to fuel the shopping season. Why, it’s simply the most wonderful time of the year!

Picking up on a recent post from Justin and Paul at Bespoke, the column goes on to note that the current run of 519 days seems like a long stretch without a serious correction – until you consider a few other recent instances of similar action. “The market trekked 1,153 trading days without a correction from March 2003 to October 2007, and 1,767 sessions from October 1990 to October 1997…”  As Tan relays, Bespoke’s calculation is that to match these past uninterrupted rallies, the current bull would have to stretch on into October of 2018.


The Rally That Just Won’t Quit (Barron’s)

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