We are living in a challenged cultural moment that finds the U.S. film industry preoccupied with derivative superhero drivel and boring ideological content that is too concerned with upsetting the social justice warrior applecart. Save for a few films this year and last (Green Room, The Invitation and Everybody Wants Some!!, Richard Linklater's "spiritual sequel" to his film Dazed and Confused), there is nothing at the box office that is doing anything new, interesting and emotionally powerful. As a result, the gaping aesthetic hole is being filled by interesting TV content.
A good example is the new Netflix TV series sensation Stranger Things, which seems like the only thing people are talking about these days and has quickly become the most watched TV show on the platform. While most ’80s nostalgia stuff is now passé, this show takes it to a whole new level by bringing back that no-holds-barred escapism that you know and loved in the films of Steven Spielberg (E.T., Poltergeist, Gremlins) and John Carpenter (The Fog, The Thing) as well Steven King’s more sci-fi oriented novels. As kids who grew up in the ’80s and frequently escaped via film and King, we became instant fans of the show.
Something else has become nostalgic for the ’80s: the performance of large cap equities in the U.S. since the lows in 2009!
Michael Darda, chief economist & market strategist for MKM Partners, points out that at 86 months, this business cycle expansion is now one of the longest in U.S. history rivaled by only three cycles: 1961-1969 (106 months), 1982-1990 (92 months) and 1991-2001 (120 months). In the chart above, he tracked how the S&P 500 Index (a collection of the 500 largest stocks in the U.S.) has performed since the cycle trough in 2009 through July of this year and compared it to the other three cycles that lasted as long as this one has (the S&P 500 is indexed at each cycle trough to its 2009 cycle trough). The current expansion's bull market seems to be tracking the 1982-1990 bull market most closely after leaving the 1961-1969 bull market in the dust. The 1991-2001 expansion ended with the rise of a tech boom and “bubble,” which probably makes that comparison invalid.
As we have pointed out in the past, we believe the current business cycle is in the later innings. Taking Darda's analysis a step further, the S&P 500 Index gained 12% in 1989 before dropping 20% during the subsequent recession, which was much higher than the average recessionary drop of 34% when looking across all recessions going back to 1928. Similar to the events of the ’80s (call us what we are: nostalgists and escapists!), we do not believe the end of the current business cycle will bring a big equity market decline compared to history.
Now stop thinking about the market and go escape into the supernatural sci-fi world of Stranger Things. You will thank us later!
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