Oppenheimer analysts said in a wide-ranging research note this week that a market top may not occur until 2025.
In a note, the brokerage and investment bank assessed the macroeconomic similarities to the 1987-1990 bull cycle, which developed against a backdrop of central bank policy tightening.
“The takeaway is that the Fed’s first rate cut preceded the market breadth peak by 4 months and the peak by 12 months,” Oppenheimer analysts said.
They explained that the market is currently pricing in a 16% chance of a rate cut in May and a 66% chance in June, and “assuming the Fed cuts its rate in the coming months, that means a market top may not occur until 2025 at the earliest.” “
According to Oppenheimer, this is consistent with the average length of a bull market (32 months) and the typical US presidential cycle (tops often occur in the year following an election).
“Until then, we expect the bull cycle to continue,” they concluded.