Need to Know: This aging economic — and stock — cycle isn't like the others
Traders might feel compelled to dust off their playbooks for late-cycle investing lately, says AllianceBernstein strategist Richard Brink, but this isn’t your typical late cycle, and typical late-cycle responses might not apply this time around.
Over that first 20 years, interest rates and inflation declined, baby boomers entered their prime earning years, and a wave of globalization and technological progress led to productivity and profitability on an “unimaginable” scale. In other words, the rich returns of the past decade weren’t driven by economic or corporate growth, but by a flood of cheap and easy money.“Leveraged returns are not sustainable,” he said. “Investors might cheer at net margin improvements and rising valuations. But it’s really just a prolonged sugar rush, without any sustainable nourishment in the form of real revenue gains or economic growth.
Overseas, the FTSE 100 UKX, -0.15% is softer in the early part of its post-Easter session, pacing a mixed session in Europe SXXP, +0.22% Asia markets ADOW, -0.92% closed lower, though the Nikkei NIK, +0.58% bucked the downtrend. Boeing BA, +0.68% doesn’t need this, but safety concerns are being raised about another one of its planes, the 787 Dreamliner, according to a New York Times report. The jetliner’s South Carolina factory “has been plagued by shoddy production and weak oversight that have threatened to compromise safety.”
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