Green Book July 2020
Different Paths, Same Ending?
For those who believe the economy “drives” trends in stock market leadership, consider the cases of 1999-2000 and 2019-2020. One period featured real growth of 4%, peak EPS growth above 20%, and bond yields at 6%. The other could see a real GDP decline of 5-10% accompanied by an historic EPS collapse, and bond yields below 1%. One featured monetary restraint and a temporary federal surplus, while the other showcased historic extremes in all policy levers that likely represent only the leading edge of what’s to come.