July 12,  5:00 pm EST

Stocks will finish the week on new record highs, and up 20% for the year.

With the catalysts lining up on a rate cut, and the potential for Trump to (then) pull the levers on trade and infrastructure, we have a path for a very big year in stocks.

Remember, since December, we’ve talked about the comparisons between 1994-1995 and 2018-2019.

The Fed was overly aggressive in raising rates back in the mid 90s, into a low inflation, recovering economy.  In ’94, the fear that Fed policy would kill the recovery, led to a world where the best return on your money was in cash.  Fast forward to 2018, the Fed also doubled interest rates in a short period of time and the fear set in that the Fed would kill the recovery.  Cash, again, was the highest returning major asset class.

By July of ’95 the Fed was forced to reverse course and cut rates.  Stocks finished that year up 36%.  Here we are, again, with a July rate cut coming to reverse the course on monetary policy.

As we end the week, let’s take a look at broader market, style and asset class returns in ’95 compared to 2019, year-to-date.