Salient to Investors:
Brian Belski at BMO Capital says:
- Target S&P500 at 1425 year-end so taking money off table, sees short-term volatility due to noisy election cycle. Sees no correction or bear market but a pullback near term to 1400.
- Target S&P500 of 1575 for 2013. Longer term bottom in housing in place and this stabilisation is good for overall market. Likes industrials, energy, consumer staples and tech. Cisco is the poster child for structural change in America which is why tech will lead the next bull market. US stocks are very attractive on long-term fundamentals. US companies looking exquisite from a cash position perspective
- Industrials have the highest yield among cyclicals while the relative yield of consumer discretionary have deteriorated rapidly versus industrials and are a source of funds
- The ISM has given several false signals over past 20 years.
- Only two stocks in S&P500 are home builders.
- Consumer discretionary stocks work best when the world coming to an end.
David Rosenburg at Gluffkin Sheff Research asks how anyone can talk about recovery with household net worth 7% lower today than pre-2007 peak and real disposable income per capita still (sic) at 5% .