A little salt from David Rosenberg on this winter's rally (via Pragmatic Capitalism):
“Is there a bull case for equities?
Well, after a 20% pop off last October’s lows, that would seem like a pretty strange question to ask.
But what is most important is not looking through the rear-view mirror, but driving ahead by focusing on what is happening through the front window. With that in mind, we now need to build some assumptions to get to the bull case…
If…
This housing recovery story in the US has more legs than just balmy seasonal December weather, and
If…
China manages to navigate its economy to a soft landing instead of a hard landing, and
If…
Europe can hang in…
Then…
One can build the assumption that, if all goes well, the forward PE multiple reverts to 15X, where it was before the trap door opened up last spring…”
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See Also:
- 30-Year Mortgage Rates Just Hit A Record Low Of 3.88%
- Asian Markets Are Rallying, Japan Already Up More Than 1%
- China's Manufacturing Index Signals Contraction, But Markets Miraculously Maintain Gains