Stock markets and Treasury bonds are pricing two diametrically opposed investment outlooks from here. They can’t both be right. For a lucid discussion on where probabilities lie see The Battle Royale: Stocks vs. Bonds (which is right?).
Productivity growth depends on capital expenditures, education, employee training, and new technologies. There are few signs spending in these areas is occurring at any greater rate than it has in the past decade. Worse, COVID-related stimulus and related spending point to a surge in non-productive debt and consumption. The additional non-productive debt burden will further hamper productivity growth.
My only complaint here is that Micheal, like most commentators, talks about “bonds” without making the distinction that he is talking about government bonds, not corporate bonds (that trade with the equity cycle).
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