A hedge fund manager says stocks reflect the early days of one of the biggest bull markets in history Ask NetWorth

• Hedge fund manager Eric Jackson believes an ‘all-out rally’ could take hold in the stock market.

• Jackson compared the current economic climate to the bull market of 1982, when prices fell and the economy grew.

• According to Jackson, interest rate cuts, economic growth and yield curve shifts favor risk assets.

According to Eric Jackson, hedge fund manager at EMJ Capital, the stock market’s relentless rally could turn into an “all-out rally.”

In an interview Tuesday, Jackson told CNBC that the current environment of economic growth and interest rates is reminiscent of the early days of the 1982 bull market, one of the stock market’s all-time best-performing developments.

The first 10 months of the 1982 bull market Nasdaq According to Jackson, 107% will rise.

“The last time the yield curve inverted for a long period of time, and then broke to the upside, as we’ve seen recently, in a benign economic environment where rates are falling, was August 1982,” Jackson said.

He added: “When that happened, there was a stock market boom that lasted for 10 months. The Nasdaq was up 107% in those 10 months. So I think we can rally all over.”

That means everything from small-cap technology stocks to mega-cap tech stocks will go up together, according to Jackson.

composition Interest rate cut from central bank, Flexible economic growth, and Inverse of the yield curve Overall a favorable environment for risk assets, especially if inflation is contained.

When a similar scene unfolded in the summer of 1982, The S&P 500 It launched a five-year bull market that delivered 229% total returns and 26.7% annualized gains, according to data from FirstTrust.

The inversion of the 2-year and 10-year US Treasury yield curve is notable because it has been in negative territory for nearly 26 months, the longest in history.

yield curve It finally turned positive earlier this month.

A luminous yield curve between positive and negative and positive is considered A reliable recession indicator, But with the economy still in good shape, the pattern looks different this time than it did in 1982.

Read the original article Business Insider