S&P 500 Record High: Bull Run or Bear Market Ahead?

The S&P's Surprising Record
The S&P 500 hit an all-time high, despite high interest rates, inflation, and recession predictions. The rally was led by tech platform stocks, but the equal-weighted S&P 500 and small-cap index also show significant gains. The rally is supported by sensible valuation metrics, making it broader than credited.
Leaders and Laggards
The rally is not just about tech stocks. Old economy companies, particularly in the energy sector, have contributed significantly to the S&P's rise. The rally is more realistic than the optimism of 2022, with valuations still cheaper than before.
Bull Market or Bear Trap?
The current rally raises questions about a new bull market. Historical comparisons show that a rally doesn't always signify a bull market. The bond market's influence on stock valuations is crucial, and current conditions may not justify the high valuations demanded of stocks.

Looking Ahead
The future of the stock market hinges on bond yields. If yields remain elevated due to sticky inflation, the new high may be short-lived. However, if bond yields return to lower levels, stocks could enter a true bull market. The stakes are high as US stocks celebrate their new record.