Thursday 8 July 2010

Who's On The Other Side Of Your Selling Equities...

Interesting to see who's on the other side of the doom and gloom crowd - myself nearly convinced aswell...

Number 1: (statement made today by BlackRock)
"BlackRock’s top performing European Equities Style Diversified team believes that worries over indebted European territories are obscuring powerful factors that will work for investors in the years ahead. Greece’s problems have delivered a wake-up call to European governments which are increasingly making firm plans to tackle budgetary problems urgently and effectively. Add to this the fact that Europe possesses competitive companies exposed to global growth, which now have the added advantage of a devalued euro."

Number 2: (research out of BofA Merrill Lynch couple of days ago)
"History suggests that intelligent austerity works.
Many countries in the Western world have to rein in their budget deficits, often by significant amounts. Can this derail the recovery from the post-Lehman recession? May austerity even be self-defeating, as a tighter fiscal policy hits demand and tax revenues? These are among the key concerns rattling financial markets. In this report, we examine the historical evidence. We find that the opposite can often be the case. Intelligent austerity can even raise GDP growth."


Number 3: (research out of Barclays Capital last Friday)
"We would caution against any substantive re-evaluation of the economic outlook, however. Although recent data highlight modest downside risks to our forecast of US GDP growth of 4.5% in Q2, they have not been uniformly downbeat. In particular, within the GDP release, both the household income and corporate profit data were revised up, while the May personal income and outlays report indicated that a rebound in labour income will support consumer spending as income from government transfer payments fades. These developments are consistent with our expectation that the recovery will continue to build momentum and that GDP growth will be stronger in Q2 than it was in Q1."


So - breather for equities or just a little blip in the downtrend....?!

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