Now at his buy-side Canadian shop Gluskin Sheff, former Merrill Lynch chief North American economist David Rosenberg is sounding as bearish as ever. He sees the recent market rally as a bear market rally and envisages a re-testing of March 2009 lows. He also fails to see a recovery. After all, one can have a quarter of positive GDP growth in the midst of a recession.
Below is a Bloomberg video of Rosenberg and snippets of the accompanying Bloomberg News story. Note, Laszlo Birinyi says this is a bull market and could move he market up 88%. He is also in the video below. I mentioned Birinyi’s views earlier this month as a foil to Jim Rogers.
Rosenberg said the nine-week gain that began March 10, the steepest over similar spans since the 1930s, was a “gargantuan short-covering rally.” A so-called short covering rally happens when investors who have borrowed shares, hoping to buy them back at lower prices and profit from their decline, are forced to purchase the shares to close their bearish bets. Rosenberg said he doesn’t expect the economy to recover in the second half. “I’m seeing no revival of consumer spending in the second quarter,” Rosenberg said. Retail sales in the U.S. unexpectedly dropped in April for a second month, indicating that rising unemployment is prompting consumers to conserve cash. The 0.4 percent decrease followed a revised 1.3 percent drop in March that was larger than previously estimated.
Source
Rosenberg Says U.S. Stock Market May Test March 9 Low – Bloomberg.com