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Stock Market Due for Correction, but Bull Market Intact – Strategist

The stock market is due for a correction, but that would only present a buying opportunity for investors, according to David Rosenberg, Chief Economist and Strategist at Gluskin Sheff. ‘Corrections come and go. We haven’t had one in four years,’ said Rosenberg. But when you are talking about fundamental bear markets in the stock market, they only occur under one scenario, 100% of the time. And that’s when you have an outright recession in the economy.’ Rosenberg doesn’t see a recession for at least another two to three years, calling this the ‘no boom, no bust’ economy. Rosenberg thinks even with a potential pullback in stocks, the market is set up to hit new highs. ‘Earnings and revenues are going to take the next level of the market to new highs,’ said Rosenberg, who added that the market isn’t overvalued at current levels. ‘You want to take a look at where is the multiple at this stage of a long expansion compared to where the multiple is in previous long expansions,’ explained Rosenberg.’If you take a look historically, the multiple where we are right now, is not outlandish.’ Rosenberg is bullish on the financial sector, including asset managers and regional banks. He also likes consumer cyclical services, which includes sectors like media and cable. Rosenberg spoke from a fishing boat at Camp Kotok, an annual gathering of economists and money managers in Maine.

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