US equities are having a good year. Maybe you noticed.

Specifically, the S&P’s up nearly 25%, not too bad as encores go. The benchmark rang up a 24% gain last year. How’s that for “roarin’ 20s”?

If you’re curious, historical precedent for consecutive 20% annual gains is sparse, where that means there are just four other examples looking back a century and a half. The table below, from BofA’s Michael Hartnett, shows those four instances. They were 1927/28, 1935/36, 1954/55 and 1995/96.

Obviously, things turned out poorly — figuratively and literally — following the late 1920s run-up, which dead-ended in the Great Depression.

Much as some of you would at least consider standing in a soup line and boiling shoe leather if it meant humiliating Donald Trump and banishing MAGA from the US political scene forever, I don’t think we want a depression and I don’t think we’re likely to get one. So that episode — the 1927/28 —> 1929/30 analogue — probably doesn’t offer much in the way of guidance.

The better analogue for 2023/2024 is probably 1995/96. That was the last soft landing and it played out at the dawn of a tech epoch that would ultimately morph into one of history’s most infamous equity market bubbles. Sound familiar? History doesn’t repeat, but it rhymes.

The S&P, Hartnett said in his latest, “will likely have another big double-digit move” in 2025 is past is precedent, but falling bond yields are the “secret sauce” for stocks to avoid a reversal. Speaking of Treasurys, bonds are down again in 2024, and rates vol remains very elevated.

If Treasurys don’t eke out another late-year rally to gain as they did in 2023, this year would mark the third annual loss in four years, an unfortunate spell with only one “recent” historical echo: 1955-58.

“Bond returns can fall in four out of five years,” Hartnett went on, in an effort to drive home the point that nothing’s impossible, and that bonds could conceivably keep on bleeding.

He suggested bonds are worth a look if 10s see a five-handle again. “We are buyers of Treasurys above 5%,” levels which could “trigger asset losses and a growth slowdown.”

For what it’s worth, I concur. A couple of evenings ago, in the Daily, I wrote that, “the contrarian in me would be a buyer of the 10-year in the event yields revisit the October 2023 highs.”