A top macroeconomist has warned that the upcoming bear market could begin with a Dot-com-style tech sell-off before evolving into a broader economic downturn.
In this line, Henrik Zeberg, senior macro strategist at SwissBlock, outlined a scenario in which the next bear market starts with a correction in technology and growth stocks, mirroring the collapse of the early 2000s tech bubble.
According to his outlook, shared in an X post on June 17, this initial phase would be followed by a balance sheet recession similar to the 2007-2009 financial crisis before ending in a stagflationary environment reminiscent of the late 1970s.
The warning comes as U.S. stocks continue to trade near record highs despite concerns about slowing economic growth, weakening consumer finances, and rising financial stress.
Largest asset bubble in history
Zeberg believes markets are approaching the final stage of what he has called the largest asset bubble in history, driven by elevated valuations and speculative excess that could trigger a major correction.
At the same time, the economist noted that leading economic indicators have weakened even as financial markets continue to rally, a disconnect that has historically preceded major market tops.
He has pointed to weakening private-sector employment, growing consumer stress, and recession-linked yield curve signals as evidence of mounting economic vulnerabilities.
Beyond stocks, Zeberg has also warned that the cryptocurrency market represents the defining bubble of the current cycle.
Despite his long-term bearish outlook, Zeberg maintains that markets could still experience a final speculative rally before a major reversal.
To this end, he previously projected the S&P 500 could rise to between 6,700 and 8,200 before reaching a cycle peak, comparing the current market to the final stages of past asset bubbles when optimism remained high despite weakening fundamentals.
