U.S. equities bouncing back faster than you might think

Just how hot is the U.S. equity market? Perhaps hotter than you might think.

As Mark Hulbert of MarketWatch points out, a large number of U.S. stocks - possibly even the majority of them - are already trading higher than where they were in October, 2007, when stocks stateside were at an all-time high.

You wouldn't know this from the main benchmarks. The Dow Jones industrial average and the S&P 500 index are both around 15 per cent below their all-time highs.

But recall that in recent years the big caps have been underperforming. Lump the entire stock market together, and you have a different story.

The Wilshire 5000 index - which looks at the combined value of all publicly traded stocks in the U.S. - helps to illustrate the point. As Mr. Hulbert points out, it's more than 6 per cent below its October, 2007, high, after taking dividends into account. But take away the 500 largest companies, and you have an index that's actually 4.3 per cent higher than that peak.

While it's typical for the small and mid caps to outperform the blue chips in a recovery, taking a closer look at the entire market shows just how far the bull has advanced. And if the big caps soon join in, we could be looking at an overall stock market that in two years' time has fully bounced back from one of the scariest bear markets in history.