The Global Bull Market Continues
Market Tops and Bottoms In 2024
Bryan Taylor, Chief Economist, Global Financial Data
Global Financial Data tracks bull and bear markets in over 100 stock markets. GFD has over 400 years of data to analyze when bull and bear markets have begun and ended and the number of market tops and bottoms that have occurred each year worldwide. A market bottom occurs when the index declines by 20% or more after a 50% increase, and a market top occurs when the market rises by 50% or hits a new high after a 20% decline.
Global Bull and Bear Markets
Bear markets occur more quickly than bull markets and over a shorter period of time with higher daily volatility, so their occurrence is quickly noted. However, it may take several years for a market to make the 50% recovery that signifies a bull market, and it is only then that analysts realize that the stock market is benefiting from a new bull market. Otherwise, a market might decline by 25%, rise by 30%, then decline again by another 25% producing one long bear market and not a series of bear markets.
This is what made the 1929-1933 bear market in the United States or the decline in Japan’s stock market between 1989 and 2012 so memorable. There was a decline, a short-term recovery, another decline and another short-term recovery for years. Investors would expect that as the market bounced back the bear was gone, but the bear only reappeared and drove prices further down, ultimately declining by almost 90%.
How significant the market bottom is globally depends upon the number of markets that hit a bottom and begin bull markets. Global markets are integrated, and bear markets often occur across global markets simultaneously. This was seen in the Covid bear market of 2020. Global markets bottomed out within days of each other, started to rise, and never looked back. Since bear markets usually last a year or two and bull markets last five to ten years, a significant number of bear market bottoms can give investors confidence that a new global bull market has begun that they can invest in for several years to come.
Figure 1 shows the number of market tops minus the number of market bottoms in each year since 1850 for all the markets in the world. More market tops show the end of a bull market, and more market bottoms show the end of a bear market.
Figure 1. GFD Total Market Tops Minus Market Bottoms, 1850 to 2024
If you look at Figure 2, the market tops in 1920, 1929, 1937, 1969, 1973, 1987, 2001, 2008, 2016, 2020 and 2022 are clearly visible while in Figure 3 the market bottoms in 1921, 1932, 1940, 1974, 1982, 1987, 1998, 2009, 2020 and 2022 are visible as well. There were fewer market tops and bottoms between 1945 and 1966 as the bull market roared ahead. 
Figure 2. GFD Global Market Tops, 1850 to 2024
The number of tops and bottoms expanded in the 1990s when many emerging markets and former Communist countries opened stock markets, increasing the number of stock markets worldwide. After the market peaked in 2000, it took three years of bear market bottoms for global markets to start moving forward again. 2007 had the largest number of bull market tops in history; however, the number of market bottoms in 2020 when Covid struck exceeded the number of bear market bottoms in either 1998 or 2009. This shows that the degree of integration of global equity markets has increased over time.
Figure 3. GFD Global Market Bottoms, 1850 to 2024
Between 2009 and 2024, the U.S. Stock market rose dramatically while other global stock markets treaded water. While U.S. Stocks, especially communication and information technology stocks, did well during the past decade, emerging markets and much of Europe failed to exceed their 2008 highs. This is reflected in the up and down uncertainty of market tops and bottoms. There were tops in the world’s stock markets during this century in 2000, 2007/2008, and 2018-2022 and market bottoms in 2009, 2016, 2020 and 2022. New market tops and bottoms are likely later in this decade.
Covid, Ukraine and Inflation
When Covid struck, it led to the largest number of bear market bottoms in the past 100 years. Although some stock markets had hit their bull market peaks in 2018, most of the remainder topped out in early 2020. In 2020, 83 stock markets hit bear market bottoms, almost all in March 2020, before beginning a new bull market. The Covid bear market was both the shortest and most coordinated global bear market in history, lasting only two months in some countries.
2022 also had a large number of bear markets. Typically, there are about five years between global market bottoms, but it was only two years after the last major global bottom in 2020 when 40 markets hit a bottom in 2022. The shortest global bear market in history was followed by one of the shortest bull markets in history. When Covid hit in 2020, many governments pumped up their markets and labor shortages appeared as people changed jobs, were laid off and moved to different parts of the country. When the world recovered from Covid, labor shortages pushed unemployment down to unprecedented levels raising wages and the prices of goods causing inflation. During 2022, inflation reached levels that hadn’t been seen since the 1980s.
This was exacerbated by the invasion of Ukraine by Russia which created shortages in many commodities and raised the price of raw materials. Once inflation became a reality, central banks realized they had to fight the first real bout of global inflation in forty years. Instead of pushing interest rates down to zero, or less, central banks raised interest rates to levels that hadn’t been seen in over a decade.
Consequently, all financial assets paid the price. Stocks, bonds, crypto, and commodities all began to decline in price as investors feared a global recession would result from the global increase in short- and long-term interest rates. The days of negative interest rates are over for good.
World Markets in 2024
Our analysis of market tops and bottoms differentiates between Developed Markets, Emerging Markets and Frontier Markets. GFD analyzes 25 Developed Markets, 25 Emerging Markets and 58 Frontier Markets. We have found that the Developed Markets are more closely coordinated than the Emerging or Frontier Markets, so the data for the Developed Markets provide a better understanding of global market trends than Emerging or Frontier markets which are more likely to move independently of global trends. Historical data on market tops and bottoms for Developed, Emerging and Frontier markets are available to subscribers.
During the past three years, global markets have been recovering from the bear markets of 2020 and 2022. There were 40 market bottoms in 2022, 18 in 2023 and 13 in 2024. At the same time, the number of market tops worldwide has been declining, falling from 31 in 2022 to 5 in 2023 and 6 in 2024. Most of these market tops occurred because of intra-year bear markets due to events within that country, not because of global factors that would drive the world into a global bear market. The world continues to participate in a global bull market.
In 2023, there were only three countries which had intra-year bear markets, Argentina, Iran and Lebanon, none of which are major world markets. In 2024 there were six intra-year bear markets that occurred in Denmark, Japan, Argentina, Egypt, Russia and Turkey. Two of these are developed markets, and the other four are emerging markets. However, most countries continued the bull markets which began in their countries in either 2020 or 2022. Markets have gradually recovered from their market bottoms and many countries haven’t even reached the 50% recovery level yet. For this reason, we anticipate that the current global bull market that began in 2020 and 2022 will continue in 2025.
Given the combination of the continued recovery from the market bottoms in 2020 to 2022 and the fact that in most countries, the recovery has been small, and that no bubbles have apparently formed, we predict that bull markets will continue in 2025. Of course, some unexpected event, such as high inflation leading to an end to the reduction in interest rates by central banks, or the outbreak of a war or some other negative external event could occur, but barring an unexpected negative exogenous event, global markets should continue in their bull market mode in 2025.
