The soaring stocks of the 2010s are hurting supply in 2022

The stock market boom seen before the pandemic isn’t helping, either. Prior market rallies have seen cash move out of “old economy” sectors as investors rush into trendier and more attractive assets, leaving less investment in more basic consumer goods, Currie said. That serves as kindling for a commodities “supercycle.” Where commodity demand holds strong, underinvestment leads to strained supply.

That trend was seen in the 1970s and the dot-com boom of the early 2000s, and it’s happening again, according to the bank. The big-tech market rally that ended in early 2020 pulled cash away from the industries key to supplying commodities. Now the country is struggling to reverse course and bring supply back up to snuff, Currie said.

“When you saw the bump in demand from the COVID stimulus, what it did is it exposed just how severe those supply constraints are. It doesn’t matter if we’re talking about metals, oil, agriculture. They’re all underinvested.”