SAUT: 7 REASONS TO REMAIN BULLISH
Jeff Saut, Chief Equity Strategist at Raymond James, says the recent move in stocks is not likely to be followed by a large decline. Instead, he says the markets are likely to to take a breather before resuming the uptrend. He cites 7 primary positive catalysts that should bolster the market:
“Accordingly, one would expect the equity market to pause, and/or pull back, from here. Yet, we don’t think any pullback will gain much downside traction because the news backdrop is likely going to get much more positive. Indeed, the Greek “can” has been kicked down the road, gasoline prices have declined 15.8% from their early May “highs,” auto production is slated to ramp 23%+ next month, Japan’s economic numbers are getting better, the world’s “mean men” are falling like dominos, capex is geared to surge since the era of 100% expensing ends soon, and when the debt ceiling is increased the stage should be set to drive stocks higher.”
Source: Raymond James
Cullen Roche
Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.
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9 Comments
Except…..
1) nothing has been truly resolved or changed in Greece or the PIIGS so the issues there are likely to surface again, and again;
2) gasoline prices are actually now trending back up as crude approaches $100/bbl once again;
3)June auto sales were significantly beneath forecast while dealer inventories surged. So why should production be ramping so aggressively?;
4)Japans’ numbers are improving from distress levels, but the country is still hampered by an inadequate electricity grid and supply bottlenecks. To say Japan is getting better is a very relative statement;
5) Mean men are falling? Really? Just seems like more protracted conflict to me;
6)Capex may not surge if there is no true economic return from a weak demand environment. This statement is speculative;
7) Raising the debt ceiling is pure political theater. The market may cheer, but we are merely buying time as the imbalances compound.
Saut’s perspectives seem more indicative of sell-side hope than critical analysis. Just MHO.
I agree, Wm. It seems to me that HFT algos bouncing around technicals is now influencing how we choose to view economic events.
Saut is correct short term – WM longer term. All about time horizon.
It is certainly true that in a technically driven, algo dominated, trading market one can be correct in their macro perspectives and wholly wrong as regards timing. I am confident in the former and have little confidence in my ability to gauge the latter. Much bigger boys with much more expensive technology will play me for the mark more times than not. That is why I largely am sitting out the equity games and letting the volatility play out. Investing in such an environment is little more than speculation. Patience is an asset class.
There certainly are many land mines out there, more than usual at this point in an expansion. Also at this point, the economy tends to be very resilient, tougher than the stats suggest. I think human nature just gives it an upward bias. Wm, I think you’re spot on with that patience thing. If this bull is for real the charts should smooth out eventually and give us a smooth swing north. Why fight it? Made a quick 2% last week. Now just watching w/ cash.
“Blah blah blah…the stock market is the economy because you peasants were dumb enough to tie your retirement to a group of sociopaths”
Ultimatly, you have to become one of the sociopaths. Traders dominate, and you have to understand that the stock market is at best an abstraction, not the economy. Spot patterns, hit and run, and your retirement will be fine.
SAUT cracks me up. In may he was quoted as saying TOO THE MOON ALICE!!! and easy 1400 by june end. during june he stateted WHY DIDN”T EEVERYONE SEE THE WEAK PATCH COMING” as the market dropped he claimed WE ARE REDUCING EXPOSURE i’ll give him credit at the lows he stated get your buy list ready. NOW HE IS FULL ON BULLTARD once again.
What is really funny at this time is that everybody is looking at Greece… Like IRL vanished from the surface of earth. Remember the sequence of the EMU-events during 2010, and think what can be 2011.