Current bull market is not a bubble
The guest argued that the current equity market is not in a bubble and has significant room to run based on historical cycle lengths and market technicals.
The argument
Ryan Detrick noted that post-WWII bull markets surviving past their third year average seven years in duration, compared to the current cycle's 3.5 years. Additionally, unlike the 2021 peak, there is currently no defensive rotation into low-volatility sectors or consumer staples, which remain at relative lows.
The thesis, stress-tested
✓ What validates it
- ✓Continued relative underperformance of equal-weight consumer staples versus the S&P 500
- ✓The current bull market extending past its fourth year without a 20% correction
▸ Risks discussed
- ▸A sudden rotation into defensive sectors like consumer staples
- ▸Geopolitical shocks or unexpected inflation spikes forcing the Fed's hand
Hear it yourself
"Although, interestingly, a lot of people don't know this, one of the Fed's primary responsibilities. People think the FOMC is the whole point of the Fed. Mhmm. They're actually a banking regulator. I know. Sure. So okay. So putting that as a banking regulator where the chairman of of the the Fed actively working against regulating, but we'll put all that aside. The legacy, really, to me, is an increased focus on asset prices at the Fed. Some would argue that's where they should have gone because more and more of the economy is being driven by assets anyway, and I believe in that. But I think"
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