We have a birthday to celebrate Saturday, and investors around the world are eager to participate.

Get your confetti ready.

Cake or ice cream?

The stock market’s bull-run officially turns two on Saturday.

The S&P 500 is up 61% since October 12, 2022, when the index hit its bear-market bottom at 3,577.03. 

We’re about halfway through the median bull market of about 46 months. So if this ends up being a typical upswing, investors have about 22 months of runway left.

Yet there’s reason to believe things are going better than usual.

Over the last two years, the benchmark index has recovered from sharp pullbacks on its way to scores of record-highs. 

In fact, about one in five trading days in 2024 have brought a new all-time close.

Not for nothing, equities have also proved resilient enough to keep climbing through the Federal Reserve’s most aggressive rate-hiking cycle in decades. 

The broad cooldown in inflation helped keep investors enthused, too. 

Barring a 40% crash before January, the S&P 500 is on pace to notch its second consecutive year of at least a 20% gain for the first time since 1998, according to Dow Jones data. 

What’s startling, too, is that the stock market is soaring even as assets in money market funds have surpassed a record $6.5 trillion in October. 

“That's quite remarkable,” said veteran strategist Ed Yardeni. “Imagine the meltup in stock prices if the Fed continues to lower interest rates.”

To be sure, Florida’s hurricanes, an intensifying Middle East conflict, and the fast-approaching presidential election all pose a risk for investors.

At the same time, the S&P 500’s forward price-to-earnings ratio — a measure that compares the price of a company to its future earnings estimates — has inched closer to “overvalued” territory this year. 

In October 2022, the gauge hovered at 15. As the Yardeni Research team pointed out in a note Wednesday, that’s since jumped to 21.6 — spitting distance to the 25.5 seen in 1999.

That said, the stock market does appear to be getting less top-heavy.

As Opening Bell Daily covered earlier this week, Wall Street considers a broadening market to be a healthy market:

• The equal-weighted S&P 500 outperformed the cap-weighted version in the third quarter

• The Magnificent Seven’s influence on the index is shrinking

• 85% of S&P 500 companies are in the green compared to a year ago 

“How long this bull will last is anyone’s guess, but we remain in the camp that looking out the next six to nine months we simply don’t see any reason to expect a recession or end of the bull market,” said Ryan Detrick, chief market strategist for Carson Group.

“Will it last another three years? All we will say there is the odds are better than many expect.”

Comments or feedback? Reply directly to this email or let me know on X @philrosenn.

Elsewhere:

🔥 Inflation topped expectations. September CPI clocked in at 2.4% annually, above forecasts for 2.3%. Stripping out food and energy, Core CPI climbed 3.3% compared to a year ago, 0.1% higher than expected. More than three-quarters of the inflation jump came from food and shelter costs, which offset a dip in energy. (Business Insider)

⛈️Biden seeks aid for Hurricane Milton. The president said Congress should come back to pass a bill for emergency relief for Florida’s Gulf Coast residents and towns. Extreme weather has left millions without power. “This is going to be a long haul for total rebuilding,” Biden said. “It’s going to take several billion dollars.” (Bloomberg)

👀 Warren Buffett sold more Bank of America stock. Berkshire slashed its stake in the firm to less than 10%, which means it’s no longer required to disclose its position frequently, according to a Thursday night SEC filing. The latest move revealed a sale of 9.5 million shares split between three transactions over the last three days. (CNBC)

Rapid-fire:

• The Bank of Korea trimmed interest rates by 25 basis points for its first cut in two years (CNBC)

• Tesla streamed its Robotaxi event live online late Thursday to huge fanfare (X)

• Initial jobless claims surged to 258,000 in the week ending October 5, the highest level in a year (AP)

• Trump Media stock spiked 17% on Thursday despite little material company news (CNBC)

• Mortgage rates just saw their biggest one-week jump since April (Yahoo Finance)

• Argentina’s monthly inflation rate cooled to the lowest level since 2021 (Bloomberg)

• The odds of a November interest-rate cut are rising once again (Barron’s)

• Trump said the hot inflation report shows the Fed cut interest rates too quickly (Yahoo Finance)

Interview:

I sat down with Anthony Pompliano, the CEO of Professional Capital Management, to discuss bitcoin’s performance versus stocks, Wall Street’s shifting views on crypto, and currency debasement:

Last thing:

Interested in advertising in Opening Bell Daily? Email [email protected]