The US stock bull market, which began with the climax of the epidemic panic and lasted for two years and ranked among the strongest in history, is about to die. On Friday, the S & P 500 index fell 1.8%, down 20% from its record closing high on January 3. The market index has fallen for seven consecutive weeks, the longest weekly decline since the bursting of the Internet foam in 2001.
The beginning and end of this round of bull market in US stocks have the existence of the Federal Reserve: it offered unprecedented growth protection measures in early 2020, helping the S & P 500 index more than double by the end of last year; Now, with inflation soaring, central bankers are withdrawing stimulus measures and investors who believe a recession is inevitable are selling stocks.
The S & P 500 index is currently at 3824. If it is maintained until the closing, it will be the first bear market since the outbreak of the epidemic in February 2020.
Optional consumer stocks led losses: the sector has fallen 35% since the S & P 500 hit an all-time high in January. Communications services and information technology also led the decline. The only sector rising this year is energy, which has risen 41% since January 3.
The S & P 500 index has entered a bear market 17 times since 1929, including this time, according to CFRA research. The longest one lasted 998 days (September 1929 to June 1932); The last longer one was 929 days (from March 2000 to October 2002). The data show that the shortest time is only 33 days (from February 19, 2020 to March 23, 2020).
According to the CFRA, the bear market has fallen by an average of about 38%, but the bear market has fallen by an average of less than 33% since 1946. And the frequency of bear markets has also decreased, only five times since 1990, including now.