The rebound in equity markets since the March 2020 trough has been stronger than the average recovery from a bear market but in line with the experience post the financial crisis.The significant easing of monetary and fiscal policy during the current recession helps explain why equities have recovered so quickly.
Rising growth optimism and a sharp rise in investor positioning left markets vulnerable to a correction, but we believe that we are still in the early stages of a new bull market, transitioning from the ‘Hope’ phase (which typically starts during a recession, led by rising valuations) to a longer ‘Growth’ phase as strong profit growth emerges.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
