From the Financial Times, because all of a sudden I am seeing Draaisma’s name a lot, and I want to track his record. Especially since his message resonates with me.
Draaisma: “The Bear Market Rally is Over”
Is Morgan Stanley’s equity strategist just unimpressed with the Bank of England’s efforts at a rescue package?
The second half of the bear market rally turned out to be rather shortlived, and Teun Draaisma is calling the top:
MSCI Europe is now up 11% since its trough on March 17. The biggest certainty for the next 12 months, in our view, is that there will be a big earnings miss, as margins are at all-time high levels while top-line growth is slowing and costs are rising, and expectations are too high. However, as is common in bear markets, we expected a bear market rally of 10%+ on the back of a drastic policy reaction to the problems at hand….
… We think that the bear market rally is now over, mainly because most policy action has now been taken or is now fully expected, while our all-important market timing indicators have given us the warning that the rally is over.
