It was a breath of fresh air when last Friday, in the aftermath of the spectacular June jobs report, a "bearish" David Rosenberg reemerged and, turning a critical eye to the BLS data, asked clients of Gluskin Sheff "what if I told you that employment actually declined 119,000 in June and has been faltering now for three months in a row? Yes, that is indeed the case." Judging by the market reaction, his analysis fell on deaf ears.
In any event, in a follow up analysis, this time looking at the disconnect between stocks and underlyhing fundamentals, David Rosenberg sat down with Chris Puplava of Financial Sense and said he is approaching the rally with a “high dose of skepticism" even while investors are hoping and praying for helicopter money to drop from the skies. The reason: the large disconnect between earnings and stocks at present which according to Rosenberg, “if you're buying this market right now you ipso facto have a view that earnings are going to rebound 25% from here in the next year.” Since the former Merrill strategist ascribes only a 10% chance of that happening, he is pessimistic.
Version - Rosenberg - Puplava
Here is an abbreviated version of what else Rosenberg told Puplava.
Financial Sense: What are your thoughts on the US stock market given that we’ve now broken out to new all-time record highs?
David - Rosenberg - Pain - Trade - Brexit—this
David Rosenberg: Well, this is the pain trade. What's remarkable is that here we had the Brexit—this is really the first real big shock since we were worrying about Greece in the past couple of years—and the most you get out of it is a 5% correction over a 2-3 week timespan. When you think about it, the stock market is a bend-but-not-break animal and, yeah, the S&P has gone to a new high [but] I'm skeptical...
When I look...
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