U.S. Equity markets opened mixed this week to kick off a new month of trading. This week, investors can expect several economic data reports, including a key jobs report on Friday. Today's guest says we are in a "7 by 7 cycle", and that bonds are the new centre of gravity. Here to explain these thoughts and much more is Fidelity's Director of Global Macro, Jurrien Timmer. He introduces us to the concept of a "7 by 7 cycle", suggesting that we're in the seventh inning of both the business cycle and the secular bull market. He explains that while the market has made new highs, it's still relatively early in the cycle, with historical patterns indicating potential for further gains. He highlights the shift from valuation-driven gains to earnings-driven gains, showcasing improving earnings and margins as positive indicators. He also notes the potential high risk posed by rising bond yields, which could lead to occasional tantrums in the stock market. The interview also touches on the concentration of gains in mega-cap stocks, the Fed's monetary policy stance, and the implications of fiscal dominance on bond markets. As per usual Jurrien will be sharing some charts, so please head to @TimmerFidelity on X to follow along.

 

Recorded on June 3, 2024.