Why one Wall Street firm sees parallels to the late 1970s and recommends shorting U.S. stocks

Why one Wall Street firm sees parallels to the late 1970s and recommends shorting U.S. stocks Why one Wall Street firm sees parallels to the late 1970s and recommends shorting U.S. stocks Citi’s quantitative strategy is at odds with analysts at the same bank Analyst at one Wall Street firm draw parallels to the late 1970s. The artificial-intelligence build-out is most often associated with the dot-com boom at the end of the last century, but quants at one Wall Street giant identify another parallel: the bell-bottomed, polyester suit, high-inflation era of the late 1970s. Citi’s quantitative strategists, led by Alex Saunders, say their macro regime model is moving into late-cycle territory due to the combination of tighter financial conditions – with Treasury yields at two-decade highs and indigestion from a flurry of corporate bond issuance – and slowing positive economic surprises.

Copyright ©2026 MarketWatch, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8 Steven Goldstein is based in London and responsible for MarketWatch's coverage of financial markets in Europe, with a particular focus on global macro and commodities. Previously, he was Washington bureau chief, directing MarketWatch's economic, political and regulatory coverage.

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