This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

The U.S. Bull Market Explained In Five Charts

Stock quotes in this article: EWZ, INDU, INP, IYZ, XLF, XLV, XLY

By Xavier Brenner

The U.S. stock market continued to power ahead in July and the Dow Jones Industrial Average (INDU) and S&P 500 Index (SPX) are up about 18% each for the year. It’s an opportune time to size up the equities market, so here are five charts that tell the story.

In July, concerns over when the U.S. Federal Reserve Bank might start winding back its $85 billion in monthly bond purchases continued to be debated by global investors, though that hardly had a negative impact on stocks. The S&P finished up just over 5% for the month:

Stocks in July

On July 31, the Fed announced that it would leave its bond-buying program unchanged to “support a stronger economic recovery.” Some analysts such as Caroline Baum with Bloomberg View now think the Fed won’t act until after September, which had been the consensus view of when Fed tapering would begin.

Bespoke Investment Group posted an ETF  sector scorecard that reveals some interesting trends. Winners: Telecom (IYZ) and Health Care (XLV) saw the biggest gains in July; for the year, Financials (XLF) and Consumer Discretionary (XLY) are up the most at more than 25%.

As for regions, Europe and Japan are doing well, while emerging markets India (INP) and Brazil (EWZ) are getting crushed – click to enlarge:

etf scorecard

Meanwhile, while small-cap stocks have been on fire for most of the year, they are starting to get pricey. As this WSJ chart shows, small cap stocks in the Russell 2000 Index (RUT) are trading at 18.3 forward earnings over the next 12 months, vs. 14.5 times for S&P 500 stocks.

small caps

Looking at the bull market that started in March of 2009 more broadly, market strategist and economist Ed Yardeni finds reason for optimism. He posted an illuminating chart mapping up the current expansion that has seen some disturbing corrections in recent years. However, this year the market has stormed ahead pretty much unchallenged.

There has been only one mini-correction, with the S&P 500 down 5.8% from May 21 through June 24. Fears that the current bull market (2009-?) might be tracking the previous one (2003-2007) have abated as stock prices rose to new record highs this year, surpassing the previous record peak on October 9, 2007, rather than starting a bear market, as they did after the market peaked on that day in 2007.

Bull Market

Finally, US stocks are smoking hot compared to most international markets, save Japan. Behold!

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,804.71 -238.19 -1.40%
S&P 500 1,946.16 -26.13 -1.32%
NASDAQ 4,422.0850 -71.3050 -1.59%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs