Do markets suffer from halitosis? Bears say so, arguing this bull market reeks of “bad breadth” (referring to only a handful of stocks driving the market), sure to sour stocks’ fortunes.
First they claimed the "Magnificent Seven” US tech stocks alone drove it higher. As some slump, they harp on instead about a subset deemed the “Fab Four", or just the “Blazing Two". Will it soon be the “Wonderful One"?
Tune out all that nonsense.
This bull market’s sweet smell wafts far and wide, despite claims otherwise – it has all along. If anything, persistent talk about “bad breadth” shows only that more gains await. Let me explain.
Yes, the Magnificent Seven, referring to Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla, boomed after 2022’s low.
Some of those tech and tech-like stocks have wobbled lately. But most remain much higher, with Nvidia and Meta leading the pack.
Bears point to these firms’ heavy exposure to artificial intelligence as “evidence” that this bull market is mostly AI hype.
Wrong. How to know? Look where tech isn’t huge – like Europe.
While the eurozone boasts a few tech mini-hubs, like the Netherlands, the sector is only 14 per cent of bloc market cap versus the world’s 23 per cent. Yet eurozone stocks are up 4.7 per cent this year through April, right in line with global stocks’ 4.6 per cent.
Dig deeper. In local currencies to avoid skew, indexes hitting all-time total return highs this year include: Australia’s ASX 200, Britain’s FTSE 100, the MSCI Denmark, Ireland’s ISEQ, Germany’s DAX, the MSCI India, Italy’s MIB, Japan’s TOPIX, the Netherlands’ AEX and Spain’s IBEX.
Of those, only the Netherlands has much tech exposure. The rest mostly feature industrials, consumer durables, financials, health care or even utilities.
This bull market wasn’t ever just the Magnificent Seven, the Fab Four or the Blazing Two.
Yes, return magnitudes vary. But 57 per cent of the MSCI All-Country World Index’s more than 2,800 stocks rose in the 12 months ended April 16. In full, 932 stocks also outperformed its 17.5 per cent return. This fabulous bull market is and was significantly global and far broader than fantasised.
We remain early in this process. Remember investing legend Sir John Templeton’s wisdom: “Bull markets are born on pessimism, grow on scepticism, mature on optimism and die on euphoria.”
We didn’t simply fast-forward from 2022’s deep, dark pessimism – when most thought the world was doomed to horrific recessions – into euphoria.
More like a grinding, gradual back and forth climb towards early optimism, as I detailed in March.
Consider history’s bubbles for a deeper dig at this.
Leading to the burst of 2000’s US dot-com bubble, initial public offerings flooded markets for years. While US IPOs tallied about $123 billion in proceeds in the 1980s, that soared to more than $463 billion in the 1990s, adjusting for inflation. That frothy ride culminated with 1999’s $96 billion. Then 2000 added another $93 billion.
Over time, these offerings’ quality fell as investment bankers thirsting after huge fees pushed any slop to market. Even 2021’s froth saw myriad low-quality special-purpose acquisition companies debut.
Where are today’s IPOs?
Some analysts note total listings are rising. True, but that is an increase from rock-bottom levels – 2022 and 2023 marked the lowest two-year stretch for US IPO proceeds since 1984-85, after adjusting for inflation.
Globally, 2023 featured the lowest volumes in a decade. Hence, while $7.8 billion in first-quarter US IPO proceeds has some optimism, we are aeons from 2021 – when full-year proceeds topped $100 billion and Spacs (now near non-existent) raked in even more than that. Most were far flimsier than today’s higher-quality issues.
So, no, we aren’t near euphoria – which lingering Fab Four obsession proves. Bubble talk never flourishes in actual bubbles. Then, people are blind to flaws. To me, sentiment still seems barely optimistic.
Against this, we have a massively misunderstood return of normal, pre-pandemic economic growth and inflation rates.
Consider this. Before 2020’s collapse, the world economy routinely grew about 3 per cent. Then Covid skewed economic data wildly, with global GDP imploding minus 2.8 per cent in 2020.
Data from the International Monetary Fund for 2021 shows global GDP growing a red-hot 6.3 per cent. That reverted in 2022 to a historically normal 3.5 per cent.
The US's “disappointing” 1.6 per cent first-quarter growth? Not out of line with normal pre-pandemic fluctuations – and better than pundits claimed.
Strong imports – a sign of healthy domestic demand – and inventory depletion both detracted from growth. But private sector components, including consumer spending, business investment and residential real estate, grew by 2.6 per cent on an annualised basis. Fine growth.
Sceptical doubting of normal growth’s return is classic bull market fuel.
That people can’t see this, but instead grouse over allegedly bad breadth, is truly rosy news.
Ken Fisher is the founder, executive chairman and co-chief investment officer of Fisher Investments, a global investment adviser with $250 billion of assets under management
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
UAE currency: the story behind the money in your pockets
The specs
Engine: Direct injection 4-cylinder 1.4-litre
Power: 150hp
Torque: 250Nm
Price: From Dh139,000
On sale: Now
Try out the test yourself
Q1 Suppose you had $100 in a savings account and the interest rate was 2 per cent per year. After five years, how much do you think you would have in the account if you left the money to grow?
a) More than $102
b) Exactly $102
c) Less than $102
d) Do not know
e) Refuse to answer
Q2 Imagine that the interest rate on your savings account was 1 per cent per year and inflation was 2 per cent per year. After one year, how much would you be able to buy with the money in this account?
a) More than today
b) Exactly the same as today
c) Less than today
d) Do not know
e) Refuse to answer
Q4 Do you think that the following statement is true or false? “Buying a single company stock usually provides a safer return than a stock mutual fund.”
a) True
b) False
d) Do not know
e) Refuse to answer
The “Big Three” financial literacy questions were created by Professors Annamaria Lusardi of the George Washington School of Business and Olivia Mitchell, of the Wharton School of the University of Pennsylvania.
Answers: Q1 More than $102 (compound interest). Q2 Less than today (inflation). Q3 False (diversification).
How the UAE gratuity payment is calculated now
Employees leaving an organisation are entitled to an end-of-service gratuity after completing at least one year of service.
The tenure is calculated on the number of days worked and does not include lengthy leave periods, such as a sabbatical. If you have worked for a company between one and five years, you are paid 21 days of pay based on your final basic salary. After five years, however, you are entitled to 30 days of pay. The total lump sum you receive is based on the duration of your employment.
1. For those who have worked between one and five years, on a basic salary of Dh10,000 (calculation based on 30 days):
a. Dh10,000 ÷ 30 = Dh333.33. Your daily wage is Dh333.33
b. Dh333.33 x 21 = Dh7,000. So 21 days salary equates to Dh7,000 in gratuity entitlement for each year of service. Multiply this figure for every year of service up to five years.
2. For those who have worked more than five years
c. 333.33 x 30 = Dh10,000. So 30 days’ salary is Dh10,000 in gratuity entitlement for each year of service.
Note: The maximum figure cannot exceed two years total salary figure.
The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
UAE currency: the story behind the money in your pockets
ICC Women's T20 World Cup Asia Qualifier 2025, Thailand
UAE fixtures
May 9, v Malaysia
May 10, v Qatar
May 13, v Malaysia
May 15, v Qatar
May 18 and 19, semi-finals
May 20, final
UAE currency: the story behind the money in your pockets
'Brazen'
Director: Monika Mitchell
Starring: Alyssa Milano, Sam Page, Colleen Wheeler
Rating: 3/5
UAE currency: the story behind the money in your pockets
Off-roading in the UAE: How to checklist
Ireland v Denmark: The last two years
Denmark 1-1 Ireland
7/06/19, Euro 2020 qualifier
Denmark 0-0 Ireland
19/11/2018, Nations League
Ireland 0-0 Denmark
13/10/2018, Nations League
Ireland 1 Denmark 5
14/11/2017, World Cup qualifier
Denmark 0-0 Ireland
11/11/2017, World Cup qualifier
Strait of Hormuz
Fujairah is a crucial hub for fuel storage and is just outside the Strait of Hormuz, a vital shipping route linking Middle East oil producers to markets in Asia, Europe, North America and beyond.
The strait is 33 km wide at its narrowest point, but the shipping lane is just three km wide in either direction. Almost a fifth of oil consumed across the world passes through the strait.
Iran has repeatedly threatened to close the strait, a move that would risk inviting geopolitical and economic turmoil.
Last month, Iran issued a new warning that it would block the strait, if it was prevented from using the waterway following a US decision to end exemptions from sanctions for major Iranian oil importers.
Terminator: Dark Fate
Director: Tim Miller
Starring: Arnold Schwarzenegger, Linda Hamilton, Mackenzie Davis
Rating: 3/5
FFP EXPLAINED
What is Financial Fair Play?
Introduced in 2011 by Uefa, European football’s governing body, it demands that clubs live within their means. Chiefly, spend within their income and not make substantial losses.
What the rules dictate?
The second phase of its implementation limits losses to €30 million (Dh136m) over three seasons. Extra expenditure is permitted for investment in sustainable areas (youth academies, stadium development, etc). Money provided by owners is not viewed as income. Revenue from “related parties” to those owners is assessed by Uefa's “financial control body” to be sure it is a fair value, or in line with market prices.
What are the penalties?
There are a number of punishments, including fines, a loss of prize money or having to reduce squad size for European competition – as happened to PSG in 2014. There is even the threat of a competition ban, which could in theory lead to PSG’s suspension from the Uefa Champions League.
Sholto Byrnes on Myanmar politics
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FULL%20FIGHT%20CARD
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The Bio
Hometown: Bogota, Colombia
Favourite place to relax in UAE: the desert around Al Mleiha in Sharjah or the eastern mangroves in Abu Dhabi
The one book everyone should read: 100 Years of Solitude by Gabriel Garcia Marquez. It will make your mind fly
Favourite documentary: Chasing Coral by Jeff Orlowski. It's a good reality check about one of the most valued ecosystems for humanity
Company%20profile
%3Cp%3E%3Cstrong%3ECompany%20name%3A%20%3C%2Fstrong%3EXare%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3EJanuary%2018%2C%202021%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFounders%3A%20%3C%2Fstrong%3EPadmini%20Gupta%2C%20Milind%20Singh%2C%20Mandeep%20Singh%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EDubai%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3EFinTech%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFunds%20Raised%3A%20%3C%2Fstrong%3E%2410%20million%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ECurrent%20number%20of%20staff%3A%20%3C%2Fstrong%3E28%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EInvestment%20stage%3A%20%3C%2Fstrong%3Eundisclosed%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EMS%26amp%3BAD%20Ventures%2C%20Middle%20East%20Venture%20Partners%2C%20Astra%20Amco%2C%20the%20Dubai%20International%20Financial%20Centre%2C%20Fintech%20Fund%2C%20500%20Startups%2C%20Khwarizmi%20Ventures%2C%20and%20Phoenician%20Funds%3C%2Fp%3E%0A
PROFILE OF HALAN
Started: November 2017
Founders: Mounir Nakhla, Ahmed Mohsen and Mohamed Aboulnaga
Based: Cairo, Egypt
Sector: transport and logistics
Size: 150 employees
Investment: approximately $8 million
Investors include: Singapore’s Battery Road Digital Holdings, Egypt’s Algebra Ventures, Uber co-founder and former CTO Oscar Salazar
Batti Gul Meter Chalu
Producers: KRTI Productions, T-Series
Director: Sree Narayan Singh
Cast: Shahid Kapoor, Shraddha Kapoor, Divyenndu Sharma, Yami Gautam
Rating: 2/5
