As a reminder no one needs, last year marked just the fifth time in a century and a half (i.e., in 150 years) that US equities posted a second consecutive annual gain of 20% or more.

The other four episodes were 1927/28, 1935/36, 1954/55 and 1995/96, with the latter generally seen as the best analogue for today. Think: successful Fed soft landing, a new tech epoch and (pipe?) dreams of a productivity renaissance.

In the first 2025 edition of his popular weekly “Flow Show” series, BofA’s Michael Hartnett reiterated that the S&P could enjoy “another big double-digit move,” but as the header on an updated version of the analogue table (on the left, below) suggests, stocks will need help from bonds, where that means a reprieve from the selloff at the long-end of the Treasury curve which dominated market headlines during the first several sessions of the new year.

“Falling bond yields [are the] secret sauce for the S&P to avoid the huge reversals seen in 1929/30, 1937/38 and 1956/57,” Hartnett wrote.

Bonds are anything but “happy” (to employ the language from Hartnett’s chart header) currently, or perhaps it’s more accurate to say investors aren’t happy with the bonds and specifically with the profligate nations which issue them, whether it’s the UK (where long-end yields are the highest since 1998) or the good ol’ USA (where the 20-year breached 5% Wednesday, followed by the 30-year on Friday, when the December jobs report came in blistering-hot.)

Indeed, Treasurys are at risk of a fourth annual loss in five (depending on which index you use), an abysmal stretch with virtually no precedent. Hartnett talked up “the sixth year of the third Great Bond Bear Market of the past 240 years,” illustrated below.

Ol’ Mike cited the “global shift to populism, rising US government debt and inflationary central banks.” A recession, defaults or both are “needed to reverse” sundry “secular bond bears of the 2020s,” according to BofA.

If you’re wondering when the zeitgeist might shift, Hartnett suggested as soon as next month.

In the event a “second wave” of inflation compels the Fed to turn “unambiguously hawkish, and lower stocks force Trump to mellow on tariffs, we flip ‘big,’ likely in February or March,” Hartnett said. That’s when USD duration will get its glow back, he went on, suggesting 5% US yields might be a dip worth buying.