A Moderately Bullish Tone Emerging vs. Recession Talk

We all know this sentiment could change in a month, but this is the first week in 2019 where I have noticed more “bullish” opinions vs. overwhelming bearishness and talk of a recession. I wouldn’t rule it out by any means, but this is encouraging (for the time being). This is from the weekend report sent to MicroCap subscribers March 2nd.

BULLISH

David Bianco, chief investment strategist at Deutsche Asset Management, on Wednesday said a rally of between 5 and 10 percent in the next 30 days was possible.

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The stock market has reached a bottom following a tumultuous 10 weeks, longtime strategist Jeff Saut told CNBC on Thursday. “On Oct. 2, we had on our short-term model a sell signal and we told people if you have trading positions you should sell. And we have put some of that money back to work. People are underinvested in stocks”. Citing his belief that the U.S. economy is not going to slow as much as expected and earnings will be strong next quarter.

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Goldman Sachs Chief Global Equity Strategist Peter Oppenheimer had reassuring words for investors in a recent interview, saying the bank feels a recession in the near future is “unlikely,” and stocks will see “slow but moderate growth” the rest of the year.

“I think people are going to be very, very focused on the hard data as opposed to the survey data, which really sort of led this panic at the end of last year.”

“Quite range-bound. I think that what we saw at the end of last year was too much negativity being priced in by investors, predominantly about the fears of a recession, which we think are unlikely,” Oppenheimer said. “In the context of that, finally we saw valuations coming down really quite a lot across all equity markets. And we’ve now seen a rebound back to levels consistent with slow but moderate growth.

“I think the upside for equity markets is capped somewhat because we don’t see valuations really driving higher. And at the same time, profits growth, which is likely to be positive, is also likely to be pretty moderate. So we’re looking at around 6 percent growth in the U.S. this year, around 4 percent Europe and 3 percent across Asia. Positive but moderate, and that’s what really should drive the return.”

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Interview with Mr. Mark Arbeter CMT/President, Arbeter Investments – discusses the breadth indicators which suggest that the rally in equities -since the December 2018 low- is the start of a new up-leg in a bull market. He also reviews the technical picture of bonds, silver, and oil.

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A Good January-February Market Means 2019 Should Be A Winner, History Says

https://www.forbes.com/sites/lawrencelight/2019/02/27/a-good-january-february-market-means-2018-should-be-a-winner-history-says/#4aeab191e932

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BEARISH

Hedge fund manager Mark Yusko sees eerie similarities between today and the implosion of the dot-com bubble.

https://www.ktbs.com/news/business/the-case-for-why-will-be-a-bad-year-for/article_264c9fee-c755-5f66-9d41-45f521dc039b.html

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NEUTRAL

The rally thundering across markets has done more than just drive up prices, it’s pushed down volatility. Markets around the world have started the year on a tear encouraged by easing trade tensions, a more dovish-sounding Federal Reserve and signs that China is bolstering its economy.

BTIG strategist Julian Emanuel sees depressed volatility as an opportunity. He recommends using options to maintain upside exposure to further potential gains in U.S. stocks without as much downside as an outright long position.

“Owning exposure through options makes a ton of sense to us” given how cheap they currently are, he said.

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Watch Out for This Recession Signal: a Tiny Unemployment Hike

If the jobless rate climbs by 0.5 point, history shows that an economic slump is coming – respected economist Joseph Lavorgna.

https://www.ai-cio.com/news/watch-recession-signal-tiny-unemployment-hike/

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MISC

Schwab’s Sonders Breaks Down 6 Popular Recession Indicators – The chief investment strategist has noticed an increase in recession chatter during Q&A sessions at investor events.

https://www.thinkadvisor.com/2019/02/26/schwabs-sonders-breaks-down-6-popular-recession-indicators/