Broker Check

Happy Birthday, And Another Record Goes Down

| July 03, 2019
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“If you’re looking for something to discuss at your barbecue while watching fireworks, be sure to mention this is now the oldest economic cycle in history at 121 months old,” explained LPL Senior Market Strategist Ryan Detrick. That’s right, this cycle just topped the previous record of 120 months from the 1990s technology boom.

Although 10 years might sound old, keep in mind that developed markets tend to have longer cycles of economic growth. “Is 10 years really that old for an expansion? Maybe not, as Australia hasn’t had a recession for nearly 28 years,” according to Detrick. “Not to mention Canada, the U.K., Spain, and Sweden, which all have had at least 15 years of growth starting in the early 1990s and ending in 2008. Going even further back we see that France, Germany, the Netherlands, Norway, South Korea, Ireland, and China have all had at least 15-year-plus expansions since World War II.”

Emerging countries tend to see more of a boom-and-bust type of cycle while more developed nations can have longer-lasting periods of growth. In fact, it’s plausible that the United States could have avoided a recession in 2001 if the 9/11 attacks had not happened, which would have produced a nearly 17-year expansion. So maybe 10 years isn’t so old?

As our LPL Chart of the Day, This Is Now The Longest Expansion Ever, shows, this is now the longest expansion ever. Additionally, over the decades as the United States turned into a developed nation, the cycles of growth tended to last longer. Thanks to the dual benefits of fiscal and monetary policy, we continue to expect this current cycle to have potentially years of growth left.

From all of us at LPL Research, we wish everyone a fun and safe July 4th holiday!

IMPORTANT DISCLOSURES

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. The economic forecasts set forth in this material may not develop as predicted.

All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. All performance referenced is historical and is no guarantee of future results.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

Government bonds and Treasury bills are guaranteed by the US government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.

This Research material was prepared by LPL Financial, LLC.

Please see the Midyear Outlook 2019: FUNDAMENTAL: How to Focus on What Really Matters in the Markets for additional description and disclosure.

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