Bernanke Drives Bull Market to 4th Birthday, 130 Percent Gain
One of the longest and most powerful equity bull markets in history turns 4 years old today. And traders believe there is just one man to thank: Federal Reserve Chairman Ben Bernanke.
At 1,461 days and counting, it's the eighth longest bull market since 1928, using data from Bespoke Investment Group. And if the S&P 500 climbs another 3 percent to surpass its 2007 high, the 136 percent total price increase will make it the fifth greatest bull market during that same time frame.
"I think Bernanke has sort of carried the load himself during this period," remarked investing legend Warren Buffett in an interview with CNBC this week. "Cheap money makes things happen."
(Read More: Buffett Still Buying Stocks, Sees 'Good Value')
In the wake of the greatest financial crisis since WWII, the S&P 500 fell to 666.79 during the trading day on March 6, 2009. Bernanke's first round of quantitative easing would follow just 12 days later.
Two more rounds of bond purchases later — along with an "Operation Twist" — and the market finds itself entering its fifth year of existence on Bernanke's juice. The other U.S. market barometer — the Dow Jones Industrial Average — rose to a record high Tuesday.
"The next step is where it will get interesting," said Mike Murphy of Rosecliff Captial. "Will the Fed be able to pass the baton to the economy and will the economy be able to run with it?"
While Bernanke has certainly lifted asset values, economic and job growth remains anemic. GDP increased by just 0.1 percent in the fourth quarter. A report Friday is expected to show the unemployment rate in February was unchanged at 7.9 percent.
That is key as the Fed chief said last week that the central bank wouldn't stop QE until unemployment reaches 6 percent, an occasion Bernanke doesn't see happening until 2016.
"Ultimately, we need job and income growth to continue supporting the economy and stock market once central banks decide to pull back," said Michael Sheldon, chief market strategist for RDM Financial Group.
Still, many investors believe others are not giving consumers and corporations enough credit. Sure, Bernanke got the ball rolling after the bursting of maybe the biggest credit bubble ever, but tangible improvements are behind the bull, they argue.
"Profit margins, productivity and real demand is at work here," said Joe Terranova, chief market strategist for Virtus Investment Partners. "It's been earnings driving it and they will continue to grow."
The S&P 500 earned just $60.43 per share at the end of 2008, according to Virtus. That will double to $123 a share in 2014, according to consensus estimates from Wall Street strategists.