What’ll it be? Soft Landing, Stagnation, Hard Landing, or Stagflation
“History Doesn’t Repeat Itself, but it often Rhymes.” – Mark Twain
Overview
Stocks recorded their worst first half in more than 50 years, with the S&P 500 plunging 20.6% (see Figure 1, below). However equity valuations have become more attractive (see Figure 2, page 2), the Fed is now acting quickly to migitage inflation, and following a short, possibly sharp, economic downdraft, we anticipate a return to trendline growth. This backdrop suggests stabilization followed by a choppy rebound in equity markets.
Figure 1. S&P 500 at Inflection Points – Bull and Bear Markets, 1996 to Date
