Healthy Appetite For Risk Argues That Stock Market Strength Is Durable

Broad strength is consistent with Bull Market Behavior

Bull markets make new highs – that is what they do. That was the message that I led with last week when talking about the market on Schwab Network.

Remember, while bear markets take you to places you never thought you would see again, bull markets take you to places you never thought you would see in the first place.

Durable strength is marked not only by new highs and a healthy number of stocks (and markets) making new highs, but by a healthy appetite for risk.

Last week’s move to new highs by the S&P 500 was accompanied by a surge in risk appetite that pushed our Risk On / Risk Off Indicator decisively into Risk On territory for the first time since early this year.

Evidence of this increased appetite for risk can be seen in globally widespread equity market strength. More than half the world made new highs last week – the best reading in over a decade.

The ACWI is making new highs while nearly 90% of the global markets in the index are above their 50-day averages. The same percentage is above their 200-day average – which is a new cycle high. When broad strength accompanies index-level strength, strength tends to persist.

The absence of broad strength in February (and the relative paucity of individual stocks making new highs) suggested that index level strength was not likely to persist. That is not the case now. While the number of net new highs (new highs less than new lows) appears less than robust, last week did feature the most net new highs so far in 2025. Not great, but good enough for the girls we go with.

Zooming out, the Bull Market Behavior Checklist is all green as the long-term trend in the Value Geometric Index has turned higher. From a breadth and trend perspective, the equity market is firing on all cylinders.