Don't let anyone try to convince you this is not a bull market 🐂

Bull markets can have bad breadth 🫢

Much of the S&P 500’s recent gains have been driven by a megacap tech companies. (Source: Goldman Sachs)

Some people are arguing that we’re not actually in a “bull market.”

Specifically, they don’t believe the fact that the S&P 500 closed 20% above its bear market closing low makes a bull market (even though this is how S&P Dow Jones Indices officially defines bull markets).

Many point to charts like the one above that show much of the market’s recent gains have been driven by a handful of megacap tech stocks, and they note that most constituents of the the S&P 500 are lagging the index.

Let me start by saying I think this whole discourse over whether or not it should be called a “bull market” is silly.

I’m reminded of what Juliet said in William Shakespeare’s play “Romeo and Juliet”:

What's in a name? That which we call a rose

By any other name would smell as sweet

As I’ve written before, whether or not you call something a bull market or a bear market (or even a recession) is a matter of semantics. Maybe it affects how things are recorded in the history books. But names don’t change the quantifiable facts of the market or the economy.

While people may disagree whether we should call it a bull market, what matters is that everyone can agree that it’s both true that the S&P 500 is up 20% and that the breadth of the rally is narrow.

That said, narrow breadth isn’t necessarily a bad thing. So let’s all take a deep breath.

Addressing breadth 🫢