As chatter of a new bull market grows, there are reasons why it still doesn't feel that way

Published Fri, Jun 9 202310:21 AM EDTUpdated Fri, Jun 9 20235:12 PM EDT

A new bull market? The S & P 500 is trading Friday morning above its recent 52-week closing high of 4,305, which it hit on Aug. 16, 2022. I'm just back from two days of speaking with exchange CEOs at the Piper Sandler Global Exchange Conference . Two things stood out: First, options and futures volumes remain really strong. One of the big topics at the conference was trading zero-day options , which, as it sounds, are options that are set to expire within a day. The second thing that stood out was SEC Chair Gary Gensler's speech on crypto, which was a broadside in which he said the entire industry was rife with "hucksters, fraudsters and scam artists." On equities, many commented about the rise of the S & P 500 , saying it did not feel like a bull market due to the narrow leadership. Much of the discussion this morning is around a comment from Bank of America's Savita Subramanian that "the bear market is officially over." She notes the S & P 500 has risen 20% above its October 2022 low. She supplemented this observation by noting that after crossing that mark, "the S & P 500 continued to rise over the next 12 months 92% of the time (vs. avg. 75% overall), returning 19% on average (vs. 9% avg. overall) based on data back to the 1950s." We may not be in a bear market, but most of the participants at the conference seemed doubtful we are in a new bull market, because it just doesn't feel like it. These are the kind of stats that were discussed: While the S & P 500 is up 11.8% year to date, the equal-weight S & P 500 (RSP), which is the "average stock," is up a measly 2.9%. About 50% of the S & P 500 is down this year. While the S & P 500 is 20% above its recent low, about one-third of the S & P 500 (about 160 stocks) remain 20% below their 52-week high. In other words: Nearly one-third of the S & P remains in bear market territory. Still, these things take time to evolve. While we are all waiting for it to start to feel like a bull market, the market this week has begun to broaden out a bit. This week, cyclicals such as retail, metals/mining, energy and industrials have outperformed, and technology has underperformed.