Trump’s stock-market rally is annihilating bears

It may be high time for stock-market bears to throw in the towel. All the pundits and prognosticators side-eyeing (that means, a sidelong glance or gaze, especially when expressing scorn, suspicion, disapproval, or veiled curiosity, according to Merriam-Webster) record-breaking equity indexes must be feeling awfully close to the point of capitulation, right about now.

Read: The stock market’s Trump rally has just begun

Who can blame them, if that is the case?

U.S. equities — heck, the global stock market — have resumed an elevator ride to new heights, after mostly stalling out once the elation sparked by President Donald Trump’s election victory in November abated somewhat.


But now the stock market is back at its rip-roaring best, with the Dow Jones Industrial Average DJIA, +0.70%  flirting with 21,000 like a lonely bar patron during last-call for drinks. This after surpassing the psychological milestone of 20,000 19 trading days ago and ringing up back-to-to-back-to-back all-time closing highs Monday, along with the S&P 500 index SPX, +0.52% and the Nasdaq Composite Index COMP, +0.52%

Mark Hulbert: Stock-market timers grow cautious, and that’s good for equities

Also read: Tug of war between bulls and bears is keeping the stock market in check 
The most recent run-up is pegged to a revived promise by Trump to cut individual and corporate taxes, with the president on Thursday hinting at a tax-policy reveal (in the coming weeks) that he described as “phenomenal.”

Check out: Trump’s top economic adviser doesn’t like a strong dollar

There are no paucity of reasons to be concerned that this rally could end in tears. MarketWatch has enumerated them, including citing Wall Street’s suspiciously low fear gauge, the CBOE Volatility Index VIX, +2.03% and heady stock valuations.

But stock’s recent rally may be doling out a useful lesson to those who are wont to dip their toes into the meltup in equities: Don’t try to time the market.

See: Does Trump rally face ‘one last meltup’ after Dow 20,000?

How bad is it for the bears?

As of Monday’s close of trading, global stocks have added $3.36 trillion in market capitalization, and about $2.1 trillion of that gain is from U.S.stocks since the Nov. 8 election, according to data compiled by Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

Read: One analyst’s warning of a February market top—and this signals it’s on track

Silverblatt hit upon one of the factors that have allowed Wall Street to notch fresh records. “Usually you have some pull back. We really didn’t have that pull back, we held those gains, which is major,” he said.

In fact, the S&P 500 has gone 85 trading days without a decline of at least 1%—marking the longest such streak since Nov. 24, 2006, and is closing in on the 105-day streak set on Dec. 15, 1996, according to Dow Jones data.

Sam Stovall, chief investment strategist at CFRA Research, told MarketWatch that investors may be reaching a point millennials refer to as “fear of missing out” or FOMO. That is when the market may finally be getting to its bubblicious heights.

For now, one consideration is how the market’s current valuation stacks up against U.S. gross domestic product. Stovall says that the U.S. stock market valuation as a share of GDP is at its highest level since the data series began in 1989 (see chart below).

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