Bear-Market Rally Or New Bull?

Aug 13, 2022 1 min read
Bear-Market Rally Or New Bull?

We won't keep you in suspense: We think the bear market in the S&P 500 bottomed on June 16. If so, then we're in a new bull market. Consider the following based on our Blue Angels framework (chart below):

(1) Corrections occur in bull markets when investors fear a recession that doesn't happen. The forward P/E drops, while forward earnings continues to rise or flatten, along with the economy. When investors' recession fears abate, the P/E rebounds and the bull market resumes.

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