The S&P 500, Dow Jones Industrial Average, Nasdaq-100, NYSE Composite — and a laundry list of other indexes around the world — are printing fresh all-time highs.
That’s what bull markets do. New highs aren’t the exception; they’re the rule.
So let’s cut through the noise: What’s the actual bear case here?
Not the “stocks are going to crash any second” stories people have been making up for two years.
Not the veterans who swear they “see tops everywhere” but never bother to look at a chart.
I mean the real bear case. If one even exists.
It’s Not a Government Shutdown
Historically, these government shutdowns are fantastic… for journalists.
They get fresh headlines to write, new panels to debate, and endless excuses to fill airtime.
They’re also a gift to storytellers who need a gloomy hook.
“Markets can’t possibly rally with a shutdown looming,” they insist, as if Washington gridlock hasn’t been a permanent feature for decades.
But here’s the reality: The market doesn’t care.
Take a look at the Bloomberg data my pal MC pulled together — it shows just how little impact these shutdowns have had on stocks.
Moves heading in are usually muted, and while the government is “shut down,” there’s no consistent bearish effect at all:
These episodes typically last a few days or weeks and then fade into the background — just another round of noise.
Journalists love it. Politicians milk it. But investors don’t have to waste their time reading glorified gossip columns about it.
The Bear Case Today
After digging through all the charts — U.S., Europe, Asia, Africa, South America — the message is clear: Stocks are trending higher across the globe.
If you’re hunting for the bear case, it really starts (and ends) with this chart: Consumer Discretionary vs Consumer Staples.
When the XLY/XLP ratio is breaking out to new highs, that tells us consumers aren’t just surviving — they’re thriving.
They’re buying Teslas, filling up Amazon carts, renovating kitchens with Home Depot runs.
That kind of leadership doesn’t show up in bear markets.
Staples? Sure, people always buy toothpaste and soap. But when Discretionary leads Staples, it signals confidence, growth, and strength.
That’s exactly what we’re seeing now, with the ratio sitting above the former highs from 2021 and earlier this year.
Until that changes, the bear case has no foundation.
Forget shutdown gossip. Forget scary valuation stories. None of that has predictive power.
This is about consumers. This is about leadership. And as long as Discretionary keeps leading, it’s all systems go for the bulls.
If the ratio fails? Then we’ll have a different conversation.
But until then… the path of least resistance is higher.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs