Friday marked a very happy ninth birthday for the bull market. The S&P 500 index is up more than 300 percent since it bottomed out on March 9, 2009, and it’s gained nearly 390 percent on a total return basis, according to Liz Ann Sonders, chief investment strategist at Charles Schwab. She adds that trailing 12-month operating earnings for S&P 500 companies bottomed in mid-2009 at less than $40 and have since climbed to $125 as of the end of 2017, with $156 expected for 2018.
Estimates for year-over-year earnings growth in 2018 jumped from 11 percent before the GOP’s tax reform to nearly 20 percent now.
Stocks surged again on Friday after a report from the Bureau of Labor Statistics showed the U.S. economy added 313,000 jobs in February, far more than the 200,000 expected. At the same time, average hourly earnings grew less than expected, ticking 0.1 percent higher, or 2.6 percent on an annualized basis. That more modest growth tempered some market fear of inflation after stronger-than-expected wage growth last month helped trigger a correction in stocks.
“For Wall Street, the combination of a strong job growth and a modest rise in wages makes for a dream report,” Patricia Cohen wrote at The New York Times.
The Times’ Neil Irwin summed it up nicely: “Nine years into an economic expansion, jobs reports don’t get much better than this.”
