Saturday, June 16, 2012

Bob Doll: Stocks 10% off April highs, but panic is not warranted

FOR SOME TIME, we have been suggesting that the US economy has been holding up relatively well compared with the rest of the world. While we are not changing that view, recent data — particularly May’s US employment report — provided a negative jolt and pushed stock prices down sharply. With their recent declines, US stocks are now down 10% from their April highs (meeting the technical definition of a correction), but are still up 18% from their October 2011 lows.

BlackRock’s summary view of the US economy is that while the US appears to have entered another slowdown phase with the data growing more disappointing in recent weeks, the case for a renewed recession still looks flimsy. The recent monthly employment report showed that far-fewer- than-expected 69,000 new jobs were created in May and that the unemployment rate ticked higher for the first time in many months, moving up to 8.2%. The data also pointed to some notable downward revisions in prior months.

Clearly, weakening jobs growth combined with other factors such as the decline in equity and commodity prices have made many investors more skittish. Although we cautioned last summer not to grow overly concerned about the prospects of a doubledip recession and just as we suggested not growing too complacent earlier this year in the face of stronger growth, we would also suggest that attitudes may be overly amplifying the negatives right now. For some time, we have been in the midst of a start, stop, muddle-through pattern of growth and we continue to believe that the US will be growing by around 2% or 2.5% for the time being.

The reality is that today, the macroeconomic backdrop is stronger than it was during the growth scares of 2010 and 2011. For one, the global policy easing cycle is in full force now, with the world’s major central banks much more responsive to deflationary concerns then they were in the past. In addition, we are starting to see improvements in the US housing market (an important distinction compared to where we were in the past) and the inflation picture also appears milder. We would also suggest that the current period of weakness is, at least to some extent, attributable to the mild winter in the US that, in effect, “borrowed” some growth from the spring.

We continue to believe that the main drag on global financial markets is not weak US economic growth, but the ongoing problems in Europe. Concerns about the stability of the eurozone and the threats of possible debt contagion have pushed down yields on such safehaven assets as US, German and UK government bonds to the point that they all now have negative yields in real (inflation- adjusted) terms. Clearly, investors who have flocked to these asset classes are exhibiting the height of risk aversion as they are more concerned about perceived “safety” than they are about looking for any sort of returns.

The next steps for the eurozone remain unclear, but as we argued the week before, BlackRock believes there are still some options for the European Central Bank and other policymakers in terms of further recapitalising the banking system, accelerating current bond-purchase programmes and taking steps to limit potential contagion. We have been saying for some time that the longer policymakers take to act, the more expensive it will be in the long term, but the political realities in Europe are making it difficult to take decisive action.

Despite the risks, our view is that Europe’s debt woes should remain moderately well contained. At present, we believe that the downside risks are already reflected in global asset prices, suggesting there is room for a recovery in risk assets should conditions stabilise or improve.

It has been the case for several years now, but the fact remains that the financial markets remain highly dependent on global monetary and fiscal policies. The world’s central banks have been aggressively combating deflation and slower growth, but it remains an open question as to whether or not the world is ready to shift into a self-reinforcing economic expansion.

Given this backdrop, it is understandable that investors are highly nervous and are attuned to any sign of negative news. From BlackRock’s perspective, it would be a severe overreaction to forecast a global recession/deflation view and turn negative on risk assets, but there is no question that some repair work still needs to take place.


Source/Extract/Excerpts/来源/转贴/摘录: www.theedgesingapore.com
Publish date: 11/06/12

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Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)
“错过时机”胜于“搞错对象”:不会全军覆没!”
做自己熟悉的事,等到发现大好机会才投钱下去

乔治·索罗斯(George Soros)

“犯错误并没有什么好羞耻的,只有知错不改才是耻辱。”

如果操作过量,即使对市场判断正确,仍会一败涂地。

李驰(中国巴菲特)
高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo


There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
冷眼(冯时能)投资概念
“买股票就是买公司的股份,买股份就是与陌生人合股做生意”。
合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
曹仁超-香港股神/港股明灯
1.有智慧,不如趁势
2.止损不止盈
成功者所以成功,是因为不怕失败!失败者所以失败,是失败后不再尝试!
曾淵滄-散户明灯
每逢灾难就是机会,而是在灾难发生时贱价买股票,然后放在一边,耐性地等灾难结束
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