Looking Back through the Bull Market from 2009 to 2019

Looking Back through the Bull Market from 2009 to 2019

From 2009 to 2019 the stock market witnessed the longest ever bull market. There were some sectors that grew with this run, while one particular sector declined. 

With online trading brokerages, you can get into the groove easier and call yourself a trader in no time. Though there are opportunities as well as risks, online stock trading through these brokerages offers you a learning experience. Looking back at the past offers you a great learning experience as well. It shows how the market has ebbed and flowed.

Longest Ever Bull Market

On the 9th of March 2019, the 10th anniversary of the longest ever bull market was celebrated. From the ashes of the March 9, 2009 low – following the market crisis – rose the bull market like a phoenix. You’d be astonished at what the closing price of the S&P 500 (SPX) was back that day in 2009 – 673.53. 10 years later, the price has shot to 2743.07. In a period of just 10 years, the S&P 500 rose by around 305%!

This Investopedia article furnishes a chart by TradingView.com that highlights the milestones on that epic journey of a decade.

image of bull market chart 2009 to 2019

Tech Rules the Roost

The interesting thing is, as per CNBC’s report of Goldman Sachs’ assessment, 25% of this massive rally was led by just 10 companies. Among these were Amazon ($AMZN), Apple ($AAPL) and Microsoft ($MSFT). Apple alone made up 20 percentage points of the rally of the S&P 500. Information technology was responsible for 22% of the return in the past ten years. Sales growth made up over half the growth of earnings in the tech sector. The rest was contributed by margin expansion. The following table by Goldman Sachs Global Investment Research’s FactSet shows that just a few stocks have dominated the bull market, and tech companies make up the majority of these.

image og bull market stocks 2009 to 2019

Now some investors are concerned that a continuation of this domination would result in the bull run being unsustainable. As seen from the table above, financial stocks also had a major role to play and contributed to 15% of the total return of the S&P 500 since 2009.

Energy Sector Went the Opposite Way

Strangely, there was a sector that experienced declining earnings per share in this decade. Goldman Sachs strategist David Kostin attributes this to how high the WTI oil prices started out with. From a year before, in the lead up to March 2009, oil had an average price of $92 per barrel. During 2018, the WTI had averaged at $63 per barrel. The high starting point made any movement from there downwards. As a result, the energy sector only contributed to 3% of the S&P 500 return. Chevron and ExxonMobil are big energy stocks, but they underperformed the market during these 10 years. FactSet stats show that while the S&P 500 returned around 400 percentage points in the past decade, Chevron returned only 163 percentage points while Exxon returned just 60.

On the 6th of March, 2009 the S&P 500 witnessed a 666 intraday bottom. On the 9th of March it posted a low 676 close. The S&P energy sector gained just 54% since then. Consumer discretionary stocks, which made up the high performing sector, gained a whopping 582% in the period. The technology sector made a 512% bounce back while financials gained 413%.

Finally, here’s a glance back at the present. There is a 9.4% rise in the market index broadly, while in the 12 months past it has been down 1.5%.

 

 

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TradeZero is an online broker dealer that offers commission free trading of the US equity markets, US equity and index options trading. Its clients receive up to 6 to 1 intraday leverage and the ability to trade the US markets without any pattern day trading rules. TradeZero clients have access to a variety of cutting edge trading platforms which include real-time streaming market data.
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Tradezero

TradeZero is an online broker dealer that offers commission free trading of the US equity markets, US equity and index options trading. Its clients receive up to 6 to 1 intraday leverage and the ability to trade the US markets without any pattern day trading rules. TradeZero clients have access to a variety of cutting edge trading platforms which include real-time streaming market data.

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