The S&P 500 has not fallen by more than 20% since it began to climb after the last recession. As a result, the index has remained in a “bull market” that is about to become the longest ever, surpassing its winning streak before the dot com bubble burst in 2000. (See Chart 1.) Although we don’t expect the S&P 500 to halve as it subsequently did then, we do think that it will end next year much lower than it is now.
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