7IM's Tirmizi: Is this the 'new normal' for US markets?

Structural shift in sector weightings

Last year saw the S&P 500 record 12 straight months of consecutive positive returns for the first time ever.

It has been nearly 400 days since the last 5% correction. This bull market has seen the second highest returns ever (only topped by the dotcom bubble), and the famed Shiller CAPE ratio is now at levels that immediately preceded the Great Depression. Worried yet? Plenty of people are. But now think about this: the recent tax cuts have seen the biggest revision to earnings expectations since the data began. On average, years that start off as strongly as 2018 see the year-end with double-digit returns. Despite the bull market, cumulative flows into equity funds are still negative ...