| Having trouble reading this email? View it in your browser. Not interested anymore? Unsubscribe Instantly. | ||||||
|
David A. Rosenberg Chief Economist & Strategist |
 |
|||||
|
Market Musings & Data Deciphering Breakfast with Dave 
Read full article (PDF 476KB)
September 17, 2009 WHILE YOU WERE SLEEPING Not much to report in terms of data flow. Equities around the planet are bid yet again as Asia reaches fresh 12-month highs. Bonds are flat in the U.S.A. but selling off overseas. The U.S. dollar is weak and that is helping maintain a positive tone to the gold price. Imagine that, bullion is north of $1,000/oz at a time when the U.S. CPI is -1.5% YoY — imagine what gold will do if (when?) that inflation rate turns positive. As we discuss in today's Breakfast, the incoming economic data in both the U.S. and Canada have improved and for the most part bettering expectations. The dilemma is that market pricing has moved far beyond the fundamentals. Despite the temptation to jump into a “liquidity-induced” rally, and these rallies can often take you to heights that you can never imagine we would get to, they cannot be sustained without a durable organic economic expansion. The problem is that the global economy in general, and the U.S. economy in particular, is operating on so much medication that it is difficult to conduct an appropriate examination of the patient at the current time. All we know is that the markets seem to have very rapidly now priced in three years worth of recovery. MR. MARKET IS ON STEROIDS Not much more to say. The S&P 500 is now up more than 60% from the lows, which is truly amazing and kudos to those who called it. But the question is whether the fundamentals will ever catch up to this level of valuation — usually after a 60% rally, we are fully entrenched in the next business cycle. Never before have we seen the stock market rise so much off a low over such a short time period, and usually at this state, the economy has already created over one million new jobs — during this extremely flashy move, the U.S. has shed 2.5 million jobs (as may as were lost in the entire 2001 recession). You may access the full text of the Research Report by clicking on the link above. This summary and the accompanying research report are the property of Gluskin Sheff + Associates Inc. and are intended for the exclusive use of clients and business associates of Gluskin Sheff. Unauthorized reproduction or distribution of this material in whole or in part is strictly prohibited. Please consult your Gluskin Sheff representative for further information. |
||||||
|
||||||