Ben Laidler, Global Strategist for HSBC, is talking extreme shit here, saying the SPY is gonna barrel lower with extreme vigor–targeting 1,960 for the SPY by year end. The crux of his argument is the market pricing in an absurd 14% earnings growth while the economy is growing at a rate less than 2%. In his research, this hasn’t happened since people went long volcano side vacation homes in ancient Pompeii.
He does, however, like defensive stocks and emerging markets.
I love how these crazy analysts always talk greasy about U.S. markets, while recommending EM. There has never been a time when our markets fell and the emerging markets didn’t follow in suit, times 3. Should we decline from here, you can depend upon Brazil and China get dropped down a sewer pipe in short order.
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Meaningful downside in yields maybe. Growth is bad and it’s really great we don’t have it. If we had real growth then we might have to raise rates. Horrible! Economic malaise is all the rage.
Long EM is so fashionable and for the life of me I cannot figure out why either, especially if your view if the world is going to hell.
The EM call is about “decoupling” … decoupling .. yeah that’s it … decoupling
WTF?!
The bottom is near folks (if not already in). BTFD.
My EWZ Put spread did quite nicely, I wish I had bought more.