Strategist Predicts Bull Market Momentum into the 2030s

As the current bull market, which began in March 2020, continues to defy expectations, one strategist has predicted that its momentum could carry it well into the 2030s. This optimistic outlook is supported by historical data and expert analysis, which suggest that the current market cycle is far from over.



Historical Precedent

Bull markets that make it past their second birthday tend to last multiple more years. In the past 50 years, every bull market that lasted beyond its second birthday had an average duration of 5.0 years or more. This suggests that the current bull market, which is already past its second birthday, has a good chance of continuing for several more years (Ryan Detrick, Carson Investment Research).

Economic Fundamentals

Despite the recent banking crisis and regional recessions, the global economy has shown resilience. China's reopening, large fiscal stimulus in the U.S. and Europe, and the strength of U.S. consumers have stabilized growth (Marko Kolanovic, J.P. Morgan). This economic stability could support the bull market.

Inflation and Monetary Policy

Inflation has been stubborn but is expected to soften in 2024, which could lead to a reduction in interest rates and quantitative tightening. This could provide a tailwind for the bull market (Marko Kolanovic, J.P. Morgan).

Technological Advancements

The rise of artificial intelligence technologies could drive excitement and investment in the market, potentially leading to a bubble and further market growth (one strategist's view).

Earnings Growth

Despite modest GDP growth forecasts, most strategists expect S&P 500 earnings to grow in 2024. Improved operating efficiencies and high profit margins could amplify earnings growth, supporting the bull market (Wall Street strategists).

Policy Uncertainty

While policy uncertainty can be a headwind, it can also create opportunities. For example, potential deregulation or corporate tax cuts could give investors conviction to add to previously unloved areas of the market, like value and mid/small cap stocks (Morgan Stanley Research).

Investor Sentiment

Investors' expectations for an early start to developed market easing cycles may be disappointed, leading to a more challenging macro backdrop for equity markets in 2024. However, this could also create opportunities for investors who are willing to take on more risk (J.P. Morgan Research).

In conclusion, the current bull market has the potential to continue well into the 2030s, driven by historical precedent, economic fundamentals, inflation and monetary policy, technological advancements, earnings growth, policy uncertainty, and investor sentiment. While there are always risks and uncertainties in the market, the current bull market appears to be on track for a prolonged run.