The stock market has officially enjoyed a bull rally for over two years. So now what?
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In today's big story, the stock market has officially enjoyed a bull rally for over two years. So now what?
What's on deck:
- Markets: Jamie Dimon's retirement doesn't mean his exit from JPMorgan.
- Tech: Roblox investors are shrugging off a short-seller's report.
- Business: It's the first day of work for Nike's new CEO. Here's what's at stake.
But first, time flies when you're making money.
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The big story
Bullish on the bull market
Happy belated birthday to the stock market's bull rally!
In case you missed it, Saturday marked two years since stocks bottomed out before going on a run. The Nasdaq 100 (88%), S&P 500 (62%), and the Dow Jones Industrial Average (46%) have posted strong returns in the two years since.
But don't worry about missing the celebration, because the party might be going on for a while. Stock market experts who spoke with Business Insider's Matthew Fox don't see things slowing down anytime soon.
In fact, the average bull market lasts longer than five years, so we might not even be halfway to the finish line. There's no consensus on exactly how the next few years will shape up, but the experts agree they don't see a market downturn in the near future.
Earnings season, which is in full swing this week, will provide more color on where things are headed. Expectations are high, and for good reason. The S&P 500 has enjoyed year-over-year earnings growth for four consecutive quarters.
So, what's the case for the bull rally to continue?
Past performance does not guarantee future results, so bull runs' history of sticking around doesn't mean this one will.
But the first thing to consider is this bull market's resiliency.
The past two years have seen multiple banks fail, a bond-market meltdown, and the unwinding of a trade tied to the Japanese yen that sent stocks tumbling. Interest rates also remained elevated as the economy battled high inflation.
Beyond the financial markets, things haven't been much calmer. The war in Ukraine rages on, and there's arguably more violence in the Middle East than there has been in decades.
Meanwhile, the run-up to the presidential election has been unprecedented. The sitting president shockingly ended his reelection campaign, and another candidate faced multiple assassination attempts.
So yes, we've been through a lot, and stocks keep going up and to the right.
While I can't guarantee things will calm down, there are some bright spots. There might not be more rate cuts this year, but the job market is strong and inflation is (mostly) under control. Whether we're in a soft landing or a "no landing," both situations are better than a recession, which seems unlikely at this point.
The actual stock market is healthier, too, as it's no longer reliant on the Magnificent Seven's performance. Instead, it's enjoying growth across different sectors, which gives it more immunity from industry-specific shocks.
News brief
Top headlines
- SpaceX's Starship completes historic 5th flight test.
- 'Let chaos reign': AI computing costs are about to plummet.
- The professor made porn. His firing may shape the future of free speech.
- Elon Musk says he will take legal action after California officials cited his politics when rejecting SpaceX launches.
- How Saudi Arabia could create a crisis for Russia's economy.
3 things in markets
- You can't get rid of Jamie Dimon that easily. The JPMorgan CEO has hinted at plans to step down in the not-so-distant future. But during the bank's earnings call, he also said there is an "almost nil" chance of him joining the next presidential administration as he plans to stay at JPMorgan "for a long period." Here's how both things can be true.
- Ken Griffin knows who he's voting for, and he's not happy about it. The billionaire hedge fund manager and Republican megadonor hasn't supported either presidential candidate. The Citadel CEO said he knows who he is voting for, but "it's not with a smile on my face."
- BlackRock wants to make alt investments not so alternative. The $11.5 trillion asset manager hopes to grow its private markets business, which includes less liquid, more expensive investments with the potential for higher returns. It comes after securing $221 billion in net inflows last quarter, a company record.
3 things in tech
- The 24-year-old wunderkind trying to make water out of thin air. With his new company, cloud-seeding startup Rainmaker, Augustus Doricko has launched a God-fearing, cigarette-loving tech hub in El Segundo, California. "Respect to Zuck, but I certainly hope the next cohort of people that build great things do it in the real world," Doricko told BI.
- Roblox took an L and bounced back. The gaming platform's stock tumbled after a prominent short-seller accused it of inflating user numbers and failing to protect children from predators. Investors appear undeterred; after the drop, Roblox's stock rebounded, with Wall Street focused on its growth potential.
- Twelve AI coding startups to watch. AI coding startups are having a moment as VCs look to invest in tools that automate the boring parts of coding and let developers focus on more creative tasks. These 12 startups have attracted funding from VCs like a16z and Menlo Ventures.
3 things in business
- I've been a very brave Gen Zer. I'd like a treat. Inflation's got nothing on Gen Z's love of bougie snacks: Young people splurge on expensive groceries more than any other generation. The reason? Consuming health-conscious food is a show of economic power — and everything else is too expensive.
- Office vacancy may deliver some housing relief. The office sector will experience a wave of distress in coming years, real estate experts told BI. That might be good news for housing supply as former offices get converted to apartments.
- It's Elliott Hill's first day as Nike's CEO. Can he just do it? Nike released its first-quarter fiscal 2025 earnings report on October 1, and revenue declined 10% from the previous year to $11.6 billion. Now, it's up to Hill to lead a full-scale comeback for the brand.
In other news
- How rich Americans can save on taxes by giving stock and real estate to their parents.
- Tesla investors don't seem to trust Elon Musk like they used to. Is that because of Twitter?
- Here's how natural disasters are shaping the buy-versus-rent decision in vulnerable states like Florida.
- Warren Buffett's company website looks like a relic from the 1990s — but that's on purpose.
What's happening today
- It's Columbus Day in the US. In some states, like New York, it's a day to celebrate Italian American culture and history.
- It's also Indigenous People's Day, which some states recognize instead of, or in addition to, Columbus Day. Thirty-five states and the District of Columbia mark this holiday.
The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, senior editor, in London. Milan Sehmbi, fellow, in London. Amanda Yen, fellow, in New York.