Jeremy Grantham says 'easiest leg' of stock-market bubble burst is over. Here's what's next.

[bucolic_frolic]

https://www.msn.com/en-us/money/markets/jeremy-grantham-says-easiest-leg-of-stock-market-bubble-burst-is-over-here-s-what-s-next/ar-AA16HmL3?

A variety of factors, including the “underrecognized and powerful Presidential Cycle, but also including subsiding inflation, the ongoing strength of the labor market, and the reopening of the Chinese economy — speak for the possibility of a pause or delay in the bear market,” he said. “How significantly corporate fundamentals deteriorate will mean everything during the next 12 to 18 months.”

The presidential cycle holds that stocks see a pattern over the course of a presidential term, with a tendency to gain ground in the seven months from Oct. 1 of the second year of the cycle through April 30 of the third year, Grantham said. In other words, stocks are now in the “sweet spot” of the cycle.

When it comes to the big picture for equities, long-run issues of declining population, shortages of raw materials and rising damage from climate change are beginning to “bite hard” into growth prospects, Grantham said.

“The resource and geopolitical shocks of last year will only exacerbate those issues. And over the next few years, given the change in the interest rate environment, the possibility of a downturn in global property markets poses frightening risks to the economy,” he wrote.