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FYI: A rare interview with Cornerstone Macro’s Investment Strategist, François Trahan, who has once again been named the number one ranked strategist on Wall Street by Institutional Investor magazine, as he has been for eight of the last ten years. Regards, Ted http://wealthtrack.com/recent-programs/trahan-still-bullish/
Interesting, yes. Short version: overweight US stocks "as much as you can." He sees blue skies and sunshine, still, for years to come. Given current circumstances, retail, durables and services will do very well. He says interest rates could fall even further, from a mere 2.35% just recently.
Also overweight the dollar, and no blue skies for foreign stocks or currencies - Cornerstone sees these current trends lasting into the 'long term.' U.S. mega caps aren't such a good play because a large share of revenue comes from abroad, and in foreign currencies. Inflation not even remotely a problem. On yields, yeah, in the short term (~ the rest of 2014), they see the 10y T possibly falling below 2%.
He said the thing that can blow up their outlook is a reasonable recovery in China, fueled by lower interest rates & the resurgence of Chinese domestic investment.
His "one investment" was actually three - long dollar, short gold, long U.S. mid-caps.
The thing I thought was interesting is that it sounds New Neutral-ish, but very bully-bully on the U.S., especially on what many people consider to be wildly overvalued smaller-cap stocks.
No mention of EMs other than China, or of FMs, which are still doing well and largely uncorrelated with developed markets.
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He said the thing that can blow up their outlook is a reasonable recovery in China, fueled by lower interest rates & the resurgence of Chinese domestic investment.
His "one investment" was actually three - long dollar, short gold, long U.S. mid-caps.
The thing I thought was interesting is that it sounds New Neutral-ish, but very bully-bully on the U.S., especially on what many people consider to be wildly overvalued smaller-cap stocks.
No mention of EMs other than China, or of FMs, which are still doing well and largely uncorrelated with developed markets.