David Rosenberg

[winston]

Rosenberg: 4 Sign of Investor Complacency

Ever wary of market risks, David Rosenberg of Gluskin Sheff highlights 4 signs of investor complacency as the equity market soars to new highs on a near daily basis:

1. The Investor’s Intelligence Survey is flashing 52%, doubling in 6 months and at a two year high.

2. Even the usually more dour AAII poll of individual investors shows a higher share of bulls than at any point in the last two years.

3. Lipper reported that flows into equity funds have been a whopping $14.9B in the past three weeks, the largest for any such period since 2001.

4. The S&P 500 has traded up to a 14X PE multiple (though it is likely higher than that since the double digit growth estimates for the second half of the year are ripe for cutting) is at the high end of this cycle’s range and at the level that touched off the interim peak last Spring (the market looks “fairly valued” because consensus EPS projections are for a 10.3% YoY profit surge in Q3 and +16.7% in Q4…with sales growth at 2-4% at best, these numbers will be next to impossible to attain without some massive cost-cutting).

http://pragcap.com/rosenberg-4-sign-of- ... omplacency

[winston]

At least he's consistent ...

David Rosenberg: 12 Signs the Economy is Weaker Than we Think by Cullen Roche

http://pragcap.com/david-rosenberg-12-s ... n-we-think

[winston]

No Bonds! by Cullen Roche

Great sentiment data here from David Rosenberg.

I know he catches a lack of flak for his negative stance on the economy, but there’s no debating the fact that he’s been dead right about the bull run in US government bonds.

And that’s at a time when virtually no one thought he was right (well, except for maybe yours truly, Gary Shilling, Van Hoisington and a few others).


http://pragcap.com/no-bonds

[winston]

Warning Sign: When the perma bears are not sure anymore, that's the time that it would give you a surprise..l

David Rosenberg: US stocks in correction, but bull market intact

NEW YORK: The US stock market has entered into a corrective phase, but the underlying bull market remains in place, David Rosenberg, chief economist and strategist of Canadian asset manager Gluskin Sheff, said on Thursday.

"We are in some kind of corrective phase in the stock market but it's not the end of the world," Rosenberg told Reuters, saying that valuations are expensive but not necessarily in bubble territory.

"I think we're still in a fundamental bull market," said Rosenberg, a long-time leading bear on Wall Street who had turned bullish about two years ago.

Rosenberg, whose Toronto-based firm had US$7.5bil in assets under management at the end of the second quarter, had changed his bearish outlook shortly after writing in mid-2012: "I do see a light at the end of the dark tunnel. Don't be surprised if I end up turning bullish ahead of the pack."

Since the financial crisis, U.S. stocks have shot up. Last year the benchmark S&P 500 rose about 30%; so far this year, the index is up about 8%.

The S&P has now gone about three years without a correction of at least 10%, an unusually long period that's caused unease among investors who are convinced that a decline must be coming.

But Rosenberg said that such a correction could bring more buyers into the market, because there are few attractive alternatives to stocks these days. He noted that money has been quick to come back into the market on previous smaller dips.

Nothing is cheap at the moment, but some sectors could gain more, he said, noting the impact of an upswing in capital spending.

"Capital spending is finally emerging as a big positive story in this country," he said, as companies move to replace aging infrastructure, lower utilisation rates hovering around 80%, and boost productivity.

Industrials, technology and financials will all benefit from that kind of spending, he said. In contrast, the bull market in US Treasuries has been over for more than two years.

A broader uptrend of higher interest rates has begun, he said, with the US Federal Reserve taking a more permissive stance toward inflation as it seeks to boost wage growth among a broader swath of the US.

The US 10-year Treasury note, which is a major benchmark for global credit and derivatives markets, is now yielding about 2.53%.

While that is off the high of around 3% toward the end of last year, the yield has yet to repeat its lows near 1.4% in July 2012.

"Bonds are just a speculative trade as far as I'm concerned," Rosenberg said. "I see the bond market more overvalued than the stock market."


Source: Reuters

[behappyalways]

ROSENBERG: Bear Markets Don't Just Happen — They're Caused By These Two Conditions
http://finance.yahoo.com/news/rosenberg ... 11875.html

[winston]

Forget the Great Recession—Welcome to the ‘Great Repricing’

By Luke Kawa

These down markets nevertheless come at a time when the American consumer—the prophesied catalyst of global growth—still appears to be in good shape.

“This is no longer 2009-14 when central banks could bolster markets … the laws of diminishing returns have clearly set in”

Source; Bloomberg

http://finance.yahoo.com/news/forget-gr ... 18784.html

[winston]

David Rosenberg nails the stock market with an 8-word sentence

by Sam Ro

“Nobody ever said it had to make sense.”

“With two-thirds of the S&P 500 (^GSPC) having reported [Q2 financial results], earnings are on track for a 2.8% year-over-year decline on a still-soft -0.1% revenue stream”

“Yet, since the earnings recession began, the stock market managed to look right through it and rally more than 20%,” Rosenberg continued. “Go figure.”

1) stock prices are arguably based on some theoretical value derived from future earnings;
2) it’s very hard to calculate that theoretical value; and
3) stocks rarely trade at or near any theoretical value.

To be a bit more specific:
1) stock prices have a relationship to earnings;
2) that relationship is complicated; and
3) that relationship rarely holds.

So, while the stock market could make sense or should make sense, “nobody ever said it had to make sense.”

“Our work suggests that valuation is a poor short-term timing indicator, but the single-most important determinant of long-term returns”.

“Valuations have historically explained 60-90% of subsequent returns over a 10-year horizon.

While “nobody ever said it had to make sense,” it seems to make more sense if you’re willing to wait.

Source: Yahoo Finance

http://finance.yahoo.com/news/stock-mar ... 00130.html

[winston]

A correction is coming, and nothing can stop it, this economist says

by Stephanie Landsman

"The problem is that the market is not priced for it. I wouldn't be surprised that we see some kind of repeat as we had towards the end of last year into January-February, which was something close to a 12 percent correction."

"We entered into the third quarter with momentum and a lot of hope, and now we're exiting the third quarter," he said. "And, let's face it: The last five or six [economic] numbers have been really soft," he contended.

"The problem now, looking at where the market is priced, you've got cycle high multiples, you've got a lot of hedge funds in the futures options market that have been chasing performance here up to the price highs, and it doesn't take much in the way of any sort of near-term adverse news to cause the market to correct."

Source: CNBC

http://finance.yahoo.com/news/correctio ... 00300.html

[behappyalways]

Japan is the 'most under-owned stock market on the planet,' and David Rosenberg says buy it

Source: CNBC

https://www.cnbc.com/2017/10/28/david-r ... arket.html

[behappyalways]

No correlation between S&P 500 and GDP, Fed has broken it down: Economist
https://m.youtube.com/watch?v=AB_DQqD1Q68