The bull market is about to turn two. Here’s what’s needed for further gains ahead

This latest bull run has been strong, even by historical standards. The S & P 500 is up about 60% since hitting a bear market low in October 2022, boosted by easing inflation and excitement around artificial intelligence. The broad market index has also reached a record above 5,700 — with some on the Street expecting it to top 6,000 before year-end. The bull market will be two later this month. If the current bull gain stands through Oct. 12, it would be the fourth-strongest among 13 cyclical bulls that lasted at least two years, according to Ned Davis Research. Ed Clissold, the firm’s chief U.S. strategist, noted that bull markets “don’t die of old age.” However, he pointed to three things for the gains to continue. .SPX mountain 2022-09-30 SPX since Q4 2022 The first: “The disinflation that has defined the cyclical bull needs to remain in place,” said Clissold. Inflation pressures are well off the levels seen in 2021. The consumer price index rose 2.5% in August on an annualized basis, nearing the Federal Reserve’s 2% goal . The second element needed for the bull run to carry on is a successful soft landing. The Fed cut rates by a half percentage point last month, as it balances easing inflation and some wobbling in the labor market. As of right now, “recession risks are low over the near term. Moderating growth should allow the Fed to continue to cut rates at a deliberate pace,” Clissold said. Lastly, Clissold said earnings growth needs to stay strong. FactSet data shows analysts expect third-quarter S & P 500 earnings are expected to have grown 4.6% year over year. That would mark the benchmark’s fifth straight quarter of profit expansion. Elsewhere on Wall Street this morning , JPMorgan upgraded EVgo to overweight from neutral, calling for nearly 80% upside. “EVGO, which generates revenue on every kW of electricity dispensed to an EV driver, is expected to continue benefitting from higher utilization on every charger on its network, especially if competitor charging networks are unable to deploy chargers due to lack of demand,” JPMorgan said.