Key takeaways

- Everyone seems to be looking for the next recession—and the next bear market—but what if both already happened?

- The global economy has been slowing for a year and a half in what can be termed an "industrial recession," and many stock markets have declined 20% to 30%, either in price or valuation or both.

- Stock markets can correct in many ways, from price drawdowns to valuation de-ratings to simply lagging their respective long-term trend lines. For the past 21 months, global equities have done all three.

- Based on price patterns since 2009, one could make the argument that stocks are ready to break out to the upside once again.

Financial markets around the world have been struggling with numerous crosscurrents, as evidenced by the almost 2-year holding pattern for most equity indexes. Since its valuation peak in January 2018, the S&P 500® price-only index has gained a mere 5%, about half the average gain of a normal year. Worse, the MSCI All Country World Index (ACWI) has fallen 3% in the same 21-month time span.

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