Sell the rallies and don’t get cute. That’s our view in a nutshell. Don’t take too much comfort in
valuation floors: we don’t see this as a valuation-driven market, but more of a de-risking, technical
market. So drawing a line in the sand regarding valuations could be a recipe for
underperformance. Also, accommodative Fed policy is a necessary but not sufficient condition to
become bullish. Instead, we must have both a well-coordinated monetary and fiscal policy effort
working together. The data flow over next month is likely to be quite poor, and the market should
respond accordingly. We would advise against getting sucked in by cheaper valuations: There is
a de-risking trend at work, and valuations are somewhat secondary at this time, in our view.
valuation floors: we don’t see this as a valuation-driven market, but more of a de-risking, technical
market. So drawing a line in the sand regarding valuations could be a recipe for
underperformance. Also, accommodative Fed policy is a necessary but not sufficient condition to
become bullish. Instead, we must have both a well-coordinated monetary and fiscal policy effort
working together. The data flow over next month is likely to be quite poor, and the market should
respond accordingly. We would advise against getting sucked in by cheaper valuations: There is
a de-risking trend at work, and valuations are somewhat secondary at this time, in our view.
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