While the eight-year anniversary of the financial crisis low was on March 9th, the bull market didn’t officially turn eight until last Friday when the S&P 500 closed at its first new all-time high since March 1st (eight days before the eight-year anniversary).  Below we have updated our bull market charts which compare the current bull market in the context of prior bulls in terms of length and strength.  Remember, we define bull and bear markets as rallies (declines) of 20% of more on a closing basis that were preceded by a 20%+ decline (rally).  At 2,979 calendar days and counting, the current bull market ranks as the second longest of all time, ahead of the early to mid-1950s bull market by about a year but way behind the granddaddy of them all which spanned from 1987 through 2000.

In terms of strength, the current bull market ranks as the third strongest of all time.  The table below lists all S&P 500 bull markets since 1928 sorted by strength.  The only two that were stronger than the current one were the 1987 – 2000 run and the 1949 – 1956 rally.  At current levels, though, the S&P 500 is right on the heels of the bull that ended in 1956.  In fact, to move into second strongest of all time, the S&P 500 would have to rally just 3.4% to 2,483.44.  A move into first place, however, is a bit more of a longshot.  In order to move into the top spot, the S&P 500 would have to rally an additional 92% to 4,614 without a 20% decline in between.  It’s a ways off, but we wonder if even that would be enough to move the AAII Bullish sentiment reading above 50%.

Welcome to Bespoke Brunch Reads — a linkfest of the favorite things we read over the past week. The links are mostly market related, but there are some other interesting subjects covered as well. We hope you enjoy the food for thought as a supplement to the research we provide you during the week.

Policy Pros & Cons

Minutes of the Meeting of the Treasury Borrowing Advisory Committee of the Securities Industry and Financial Markets Association May 2nd (US Department of the Treasury)

A summary of the TBAC meeting assessing the need for ultra-long-term bonds with maturities out to 50 or 100 years. While their decision isn’t final, it does make it less likely the Treasury will adopt coupon debt that long. We should note the TBAC does suggest a 50 year zero coupon bond might receive lots of interest. [Link]

Corporate Tax Cut as Growth Elixir? Foreign Experience Suggests Caution by Greg Ip (Wall Street Journal)

Evidence suggests that regardless of other potential upsides or downsides to changing the corporate tax rate (there are many arguments on both sides), large corporate tax cuts will not create rapid economic growth. [Link; paywall]

Germany

Why Germany Still Has So Many Middle-Class Manufacturing Jobs by Hermann Simon (Harvard Business Review)

An analysis of what makes Germany’s famed mittelstand so good at producing “Hidden Champions”: companies that excel within their industry, have revenues below 5bn EUR, and are unheralded by the general public. [Link]

The global decline in the labour income share: is capital the answer to Germany’s current account surplus? by Bennet Berger and Guntram Wolff (Bruegel)

The authors argue that Germany’s large and persistent current account surplus is a different macroeconomic response to the same problems which result in high unemployment in other Eurozone members. We agree. [Link; 17 page PDF]

Sports

The Future of Football by Spencer Hall (SBNation)

A long piece but one filled with interesting thoughts about the future of the most popular sport in America: rules changes, coaching, and equipment all get attention. [Link]

How Ueli Steck Met Mountaineering’s Oldest Companion: Tragedy by Michael Wejchert (NYT)

The story of a Swiss mountain climber’s daring career and an investigation of the sport of mountaineering. [Link; soft paywall]

Moar Fyre

Comcast Rejected Funding Days Before Doomed Fyre Festival by Polly Mosendz and Kim Bhasin (Bloomberg)

Last week’s horrific failure, the Fyre Festival, was a (massively mistaken) branding exercise for Fyre Media Inc, a company that Comcast’s venture capital arm (yeah, we had no idea either) declined to fund just before the debacle. [Link]

“Let’s just do it and be legends man” by Gabreille Bluestone (Vice)

More on the massive squandering of resources and general ineptitude of the Fyre Festival organizers. False advertising class action lawsuits against models, “disaster pricing” for basic equipment like toilets and showers, customs snafus, and everything else you can imagine. [Link]

Hunger

Shameful Lunch Shaming by Billy Shore (Medium)

A passionate argument in favor of giving hungry kids the food they need, without stigma. [Link]

Venezuela Is Starving by Juan Forero (WSJ)

The catastrophic results of nationalization and economic collapse: the most basic resources to sustain life are no longer available in Venezuela. [Link; paywall]

Decline & Fall

Tyler Cowen and the Fallacy of American Laziness by Laurence B. Siegel (Advisor Perspectives)

Savage pushback against the idea George Mason economist Tyler Cowen has trumpeted: that American society is in decline and it’s all thanks to a “complacent class”. [Link]

Brexit dinner: live leaking from the second sitting by Robert Shrimsley (FT)

A satirical imagining of another round of last week’s disastrous Brexit dinner, presented in the format of angered live-tweeting from both sides of the table. [Link; paywall]

Bankruptcy

Amid Brick-and-Mortar Travails, a Tipping Point for Amazon in Apparel by Nick Wingfield (NYT)

As retailers reel, Amazon is looking for ways to up the pressure on apparel retailers with custom clothing options and private-label manufacturing. [Link, soft paywall]

U.S. Courts: Bankruptcy Filings Drop 6 Percent in 2016, Lowest since 2006 by Bill McBride (Calculated Risk)

As consumers and businesses continue to see improved income and activity in the wake of the last recession, bankruptcy filings have made new lows. [Link]

New Products

Elon Musk teases future plans at TED talk by Glenn Chapman (AFP/Yahoo)

At a TED talk in Vancouver, Musk talked about tunnel boring and mass transit. [Link]

U.S. SEC approves request to list quadruple-leveraged ETFs (Reuters/Yahoo)

The good news is that you’ll soon be able to buy a 4x leveraged long or short version of the S&P 500. The bad news is that you’ll soon be able to buy a 4x leveraged long or short version of the S&P 500. [Link; auto-playing video]

Have a great Sunday!

Below is a look at Bespoke’s asset class performance matrix using key ETFs that we track on a regular basis.  For each ETF, we highlight its total return over the last week, quarter-to-date, and year-to-date.

US equity ETFs posted modest gains this week, with the S&P 500 rising 0.68%.  The real star of the week, and for that matter, quarter and YTD has been the Nasdaq 100 (QQQ), which is up over 16% on the year!  Just two sectors (Energy and Telecom Services) were down on the week, while Financials, Technology, and Industrials led the way higher.

Although US equities were up, international markets continued their trend of outperformance with Europe up sharply, although Asia was a bit weak.  The YTD returns for some of these countries have been incredible with gains in excess of 15% not out of the norm.

Have a great weekend!

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