This strategist has 10 reasons why the markets will rebound!!!!

Discussion in 'Wall St. News' started by S2007S, May 26, 2010.

  1. S2007S


    I had to post this just to get a good laugh of how these strategists think, he gives 10 "good" reasons why the market will be higher in 4-6 weeks. Now I could understand a market rebound if the stock market was off 30-40%, but after nearly a 100% run in the indexes and a small minor pullback of 10% why even bother to think this market needs to rebound so quickly.

    10 Reasons Why Markets Will Rebound: Pro
    Published: Wednesday, 26 May 2010 | 1:16 PM ET
    Text Size
    By: JeeYeon Park
    CNBC News Associate

    The sovereign debt crisis in Europe may be a silver lining in the U.S., said Jeffrey Kleintop, chief market strategist at LPL Financial. He explained why he believes the markets will rebound. (Scroll down to read his 10 reasons.)

    “This is no different from what we saw in January, when we saw a 8 to 10 percent pullback—it’s fundamentally the same and we’re seeing some of the same technical patterns play out as well,” Kleintop told CNBC.

    In four to six weeks from now, stocks will be up and headed back near April highs, Kleintop said. He told investors that this is a good opportunity to buy commodities and U.S. stocks.

    “Take a look at small-cap stocks: they will rebound the strongest from this pullback, along with sectors like industrials and materials,” he advised.

    “And focus on commodities—oil’s having a tough time getting below $68 and there’s a good opportunity there along with the base metals.”

    Kleintop’s 10 Reasons For a Market Rebound:

    1. European debt problems are unlikely to get much worse

    2. The derivatives and leverage tied to sovereign debt is very different than financial crisis of 2008

    3. Budget and debt problems in Greece are an aftershock of global financial crisis

    4. Expectations for the euro zone are low

    5. Problems in Europe are good for the U.S. consumer

    6. Conditions remain favorable for growth

    7. Stock market valuations are now low at a forward price-to-earnings ratio of about 13 times.

    8. China’s growth remains on track

    9. Financial reform legislation may see a lot of changes to moderate it

    10. Outlook for Fed rate hikes may now be pushed out

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