Chris Watling, Chief Investment Officer at Longview Economics, believes that markets are entering the second year of a ‘mini-cycle upswing’ which typically lasts around three years. He says 2019 was the first year of the cycle with the rally in equities being supported by central bank largesse. Comments in December from Jerome Powell snuffed out the prospect of a US rate hike, sparking a powerful rally in equities.
“That was just a green light to load up and quite a lot of hedge funds switched their positions on the back of that from short to long.”
While central banks are an important part of the rally, Watling explains that there are other powerful forces supporting what he believes is a multi year trend higher.
In this short video he shares a key economic indicator supporting his thesis and explains why he believes 2020 can be another bumper year for markets.
Note: This video was filmed on 19 February 2020.
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