New highs exceeded new lows last week for the first time since August (and only the third time since November 2021). That is a positive development but there is more work to be done before concluding that a new bull market has been reborn.
More Context: With this week’s improvement, our bull market re-birth checklist now has two out of the five criteria satisfied. It’s heading in the right direction, but 2022 was full of bounces that were not sustained and strength that did not persist. Big moves in both directions was a key part of last year’s experience, which saw the S&P 500 recording the 3rd most 3% up weeks and the 3rd most 3% down weeks in the past 70+ years. Further, we are seeing relative trends point to new leadership (equal-weight over cap-weight in the US; the rest of the world over the US on a global basis), but in most cases, the new leaders remain in longer-term down-trends. If we want to get more constructive on equities as an asset class, that needs to change.
In our Market Notes, we take a Deeper Dive into the evidence of bull market behavior, including where we are seeing resiliency in the US and leadership around the world.
