Here’s my weekend warning to the legion of stock market bulls: You have made bank, but don’t let that lead to complacency.
Just because we are in a bull market doesn’t mean investors should ignore present-day realities in the market and the companies that power them. If you do, you might miss the early signs that the bull market could end.
Look at the start of the third quarter earnings season so far. Iran war-driven inflation is smacking corporate America in the face.
Read more: What is a bull market?
Delta (DAL) said on Friday its fuel expense rose by nearly $2 billion year over year. It guided well below consensus on earnings for the fourth quarter as a result of those soaring fuel prices.
“Fuel prices will recede. How much, how fast, I do not know, but they will,” Delta CEO Ed Bastian said on the company’s earnings call.
Hardly reassuring.
PepsiCo (PEP) cut its full-year profit outlook on Thursday, in part because inflation is hitting all areas of its business.
And do you think the banks reporting in the coming week are going to totally crush it in the backdrop of the 10-year US Treasury yield ripping higher? It doesn’t exactly work like that.
In fact, bank stocks, such as JPMorgan (JPM), Bank of America (BAC), Citigroup (C), Wells Fargo (WFC), and Goldman Sachs (GS), are all in correction territory. Investors are bracing for unflattering news here!
Enjoy the good vibes for now.
Investors are currently living in the 11th bull market since the 1950s, which is on track to become the seventh to complete at least four full years on Oct. 2, per a new analysis by Truist co-chief investment officer Keith Lerner.
Measured against every bull market dating back to the 1950s, the 119% advance sits near the middle of the pack, well below the 401% gain during the 2009 to 2020 cycle and the 582% gain from 1987 to 2000.
The historical average advance for a bull market in Lerner’s measurement period is 184%. Of the 10 prior bull markets, six lasted longer than four years.
All of this is great. Who doesn’t love a bull market?
Just be mindful that nothing lasts forever.
Brian Sozzi is Yahoo Finance’s Executive Editor, host of the Sozzi Unleashed morning show, the ‘Power Players With Brian Sozzi’ podcast and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
Click here for in-depth analysis of the latest stock market news and events moving stock prices
Read the latest financial and business news from Yahoo Finance
