From FT Alphaville:
There’s no joie de vivre or bull sentiment behind their views but both CLSA’s Christopher Wood and Marc (aka Dr Doom) Faber are betting on a further continuation of the equity market rally.
Wood, writing in his weekly Greed & Fear newsletter, reckons US ISM (manufacturing) data, due out this week, is likely to provide further evidence of statistical recovery “to give hope to those betting on a ‘normal’ recovery”.
As for the US housing market, there’s some evidence of rising transaction volume but that doesn’t mean a real recovery is at hand. In fact, he warns, the continued deterioration of the US commercial property market is not just an American issue: there are similar commercial real estate problems in Europe, particularly in the UK.
On the dollar’s near-term trajectory, Wood notes that with the risk trade back on in recent weeks, the US dollar index fell earlier this week to the critical support level of 78-79 before rebounding slightly. While a “climatic breakdown” in the dollar is unlikely at this juncture, investors should monitor the risk, he adds.
Faber, meanwhile, also sees a continuing equity rally — mainly because economic conditions “will continue to deteriorate and necessitate additional stimulus packages and further quantitative easing (read money-printing)”....MORE