We recently updated our research on the MRB Stylized Investment Cycle, and note that the global stock/bond ratio is undergoing an extended topping out process that began in early-2018, albeit still with a mild upward bias due to extreme policy support and depressed bond yields.
The global economy and financial markets have developed excesses and exhibit some late-cycle characteristics, but an end-of-cycle catalyst is still missing. In terms of potential catalysts, our three primary candidates remain restrictive monetary policy, choking (high) bond yields and trade wars.
The last of these catalysts reared its head again last week, as the U.S./China trade negotiations hit a big bump. While there is considerable near-run uncertainty, we ultimately expect a trade agreement and, thus, more upside in the global stock/bond ratio.