Zulauf Predicts Strong Bull Run in 2026 and 2027
Macro investor Felix Zulauf has revised his market outlook, confirming earlier predictions for 2025. He states that stocks peaked early in the year, corrected by 15–20%, and volatility increased amid geopolitical tensions. Zulauf believes a global economic reshuffle may lead to a long-term rally.
Zulauf indicates that the S&P 500 has likely bottomed near 4,835, close to his projected level of 5,000. He expects a potential dip to 4,500 in May, followed by a recovery. If a recession is avoided, he forecasts a target of 7,500 by late 2026 or early 2027, representing over 50% upside from current levels.
Key factors supporting his outlook include:
- Global pessimism has peaked, with a Bank of America survey showing the most bearish sentiment in 25 years.
- Treasury yields have risen (10-year at 4.6%+), indicating structural changes in capital flows.
- Foreign holdings of U.S. Treasuries are substantial at $7.2 trillion, increasing vulnerability to bond market shocks.
- The U.S. dollar index (DXY) is expected to decline below 98, suggesting a multi-year downtrend.
Zulauf characterizes 2025 as a transition year, advising tactical investment strategies. He emphasizes using sharp pullbacks to build long-term positions and suggests that when instinct urges selling, it may be time to buy.
He predicts a global rebalancing where foreign markets will outperform, particularly European equities and Asian stocks, due to unsustainable U.S. deficits and geopolitical challenges.
Sector-specific insights include:
- Bearish on long-duration bonds, anticipating 10-year Treasury yields exceeding 5% by 2026–27.
- Bullish on commodities, particularly crude oil, projected to reach $150–$200 by 2027.
- Long-term bullish on gold, expecting peaks near $3,400 before corrections to $2,600–$2,700.
Zulauf notes that the AI hype is diminishing, and mega-cap tech stocks may not drive future gains. He advises focusing on U.S.-based industrials and resilient business models aligned with domestic growth.
Despite risks like a potential global recession in late 2025, he believes the worst is priced in. Zulauf recommends being fully invested by fall 2025 for a strong 18- to 24-month bull run.