Sunday, February 23, 2020

Current Market Similar To 1950's & 1980's Bull Market

I have noted in earlier posts beginning in 2016 (here and here) that the current equity market track resembles the bull market of the 1950's and 1980's. Those earlier articles noted policy similarities currently in place similar to policies pursed in those earlier decades, like tax cuts, infrastructure spending and more. As the below chart shows, the bull market that began in 2013 is tracking closely to that of the 1980's and projected to meet the 1950's & 1980's markets in a year or so.

Also worth noting in the above chart is the current market advance has a few more years to run if prior bull market lengths are a guide.

Projecting that the market continues to move higher, it will likely be on an uneven path. Near term headwinds include the economic impact of the coronavirus. Given the impact on the worldwide supply chain and consumer demand, first quarter GDP is likely to come under pressure not only in the U.S. but global GDP as well. Again, history does provide some insight into the potential impact of the current epidemic and the past suggests longer term damage to the economy/market is unlikely as seen below.

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