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An index of the 500 largest companies trading on Wall Street, weighted for their market capitalisation. The S&P is more representative of the New York Stock Exchange (NYSE) than the Dow Jones which is a simple average of the 30 largest companies on Wall Street. We also suggest that the direction of the S&P is a good indication of whether world markets are generally in a bull or a bear trend. If a long-dated moving average (like 250 days or more) of the S&P is falling then world markets are probably in a bear trend and vice versa. Obviously, you do not want to own shares when world markets are in a bear trend, because during a bear trend as many as 80% of shares fall - and vice versa. On 3rd January 2022, the S&P500, closed at an all-time record high of 4796.56. It was in a bull trend from 9th March 2009 to 3rd January 2022 - making it the longest bull trend since World War II. After that it began falling in a series of cycles until its reached a low point of 3588.84 on 11th October 2022. Theoretically, any fall of more than 20% is regarded as a new bear trend, but this downward trend was so short (only 10 months) and only 25% - so we regard it as an unusually large correction - not a bear trend. After that cycle low on 11th October 2022 the S&P has been moving up rapidly. In our view it will break above its previous record high in due course. In other words, we believe that the bull market which began in March 2009 is still in progress. The Federal Reserve Bank in America has now managed to reduce inflation in America to 3,7% (October 2023) and is steadily bringing it down towards its target of 2%. It also is engaged in a quantitative tightening (Q/T) program to draw cash out of the US economy at the initial rate of $47,5bn per month and later at $95bn per month from September 2022. However, this will probably not be sufficient to dent the profits of S&P500 companies in the short term. One factor that is sustaining growth in S&P500 companies is the implementation of artificial intelligence (AI). This has been particularly noticeable in Microsoft which now has a market capitalisation of over $3 trillion and the share gained almost 7% in the week ending on Friday 10th November 2023.

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