- The history of supercycles in innovation, geopolitics, and markets points to low yields and low inflation over the coming decade.
- Extreme tech outperformance and energy underperformance have been typically followed by relative energy outperformance, but depressed S&P 500 returns over the subsequent decade.
- High earnings growth in periods of secular low yields and inflation have typically been followed by earnings shocks and secular bear markets in stocks.
- The decline in metals momentum suggests an earnings shock may be in the offing.
- We need more innovative techniques for forecasting extreme outcomes in markets.
For further details see:
SPY: Long-Term Outlook Remains Unchanged