The Final Lap: 1986/87 Redux?

It’s Not ‘Risk Off’ Yet, But Policy Makers are Stretching Out The Cycle

Everything seems on track? The Global Liquidity upswing is 33 months old. Bond yields are rising and yield curves bearishly steepening. Credit spreads have tightened. Commodities are firm and inflation pressures are stirring. Equity performance is rotating towards late-cycle areas. The US dollar is weakening and foreign stock markets are outperforming. In short, the cycle is fast-maturing, but akin to the 1986/87 period policy makers are extending the cycle.