Line chart comparing the current bull super cycle with two previous bull super cycles.
Y-axis: Index value (indexes to 100 at start of bull super cycle); X-axis: Calendar days since start of bull super cycle.
Super cycles shown:
- 1971-1980
- 1999-2008
- 2020-current
All three super cycles follow roughly the same trend for the first 561 days, rising from 100 to 170 (current cycle), 152 (1999 cycle), and near 150 (1971 cycle).
By 680 days the two historical cycles had differentiated considerably, with the 1971 cycle at over 227 and the 1999 cycle at 150. The 1971 cycle continued to lead for some time, with peaks at roughly 875 days (247), 1,031 days (238), 1132 days (also 238), and 1,421 days (230).
By 1,642 days, however, the two cycles began to index similarly, indexing between 195 and 240 until 2,156 days, when the 1999 cycle outperformed. By 2,640 days, the cycle indexes met again around 235 and tracked similarly until roughly 3100, when the 1971 cycle fell to 269 and the 1999 cycle was at 310. By 3,285 days (the last data point for comparison of the two cycles) the 1999 cycle continued to lead at 392 while the 1971 cycle was near 333.
Sources: Bloomberg and Wells Fargo Investment Institute. Daily data. 2020–current bull super cycle uses Bloomberg Commodity Index from March 18, 2020 to September 30, 2021. 1999–2008 bull super cycle uses Bloomberg Commodity Index from July 13, 1999 to July 2, 2008. 1971–1980 bull super cycle uses Reuters Continuous Commodity Index from October 4, 1971 to November 20, 1980. Super cycle = If you look at commodity prices over the very long term (hundreds of years), it becomes evident that they tend to move in overall bull and bear cycles, some lasting decades. These are super cycles.
Key Takeaways
- Since 2020’s low, commodity prices have been on an incredible run. If we are correct that a new bull super cycle has begun, history suggests that there could be even more gains to come.
- Keep in mind that past bull super cycles have not been straight shots to the moon. We fully expect to see dips, lulls, and pauses in commodity prices during the bull.