The 2020 comeback to record highs resembles storied market revivals of the past

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The S&P since the March 23 low is resembles strong rallies off the 1982 and 2009 bottoms

soared anew on the fundamentally substance-free announcement of a 5-for-1 stock split, it all suggests an emerging complacency that could make further easy upside difficult and leaving the broad market ill-positioned for any adverse surprise.Yet from a broader angle, the market action — accompanied by an improving cadence of most economic measures — places the past few months in close alignment with some storied market revivals of the past.

But there's a debate worth having over whether these historical instances are good precedents for today. The five-week, 34% collapse in the S&P 500 was less a classic bear market than an event-driven crash. The losses from the '87 break were relatively quickly recouped . That was the moment that the Fed began conditioning investors that it would rescue markets. And stocks did pretty well over the next couple of years before hitting another mild bear phase, before resuming a nice uptrend – just not as strong as from '82 or '09.

Even if the rally arguably appears slightly ahead of itself, the underlying message of the tape is encouraging. The market has helpfully broadened out lately beyond huge growth stocks toward cyclical areas like global industrials, transportation stocks and housing-related names. The S&P has deflected negative seasonal tendencies in August so far. Corporate credit has performed extremely well, with compressed borrowing costs supporting equities.

 

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Nah! There is no stopping COVID. What does THIS have to do with 1982 or 2009? Just because there's a rally doesn't mean it has anything to do with those previous moves.

There is no comparison to this monstrous stock market bubble inflated with central bank monetary inflation.

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