Thursday, 30 January 2020

Markets mixed as concerns over China coronavirus linger

Markets were mixed on Wednesday.

The S&P 500 fell 0.1 percent but the STOXX Europe 600 rose 0.4 percent.

In Asia, the Hang Seng plunged 2.8 percent on its first day of trading after the Lunar New Year holiday but the Nikkei 225 rose 0.7 percent.

Better-than-expected results from blue-chip companies in the US were offset by lingering concerns over China’s coronavirus outbreak.

“Even if this strain of Coronavirus may be deemed less potent than SARS, there is no excuse for complacency given risks that proliferation is likely amplified by far more extensive travel in and out of China compared to (the) SARS period,” Vishnu Varathan, head of economics and strategy at Mizuho Bank, wrote in a Wednesday note.

The Federal Reserve held its benchmark fed funds interest rate steady in a range between 1.5 percent and 1.75 percent on Wednesday, saying the US economy remained on a moderate growth path.

“While the economic environment is not particularly strong, investors will become comfortable that the longer-term outlook remains favorable, albeit subdued,” said Byron Wien, vice chairman for private wealth solutions at Blackstone.

Wednesday, 29 January 2020

Markets mixed as China virus death toll rises

Markets were mixed on Tuesday.

The Nikkei 225 fell 0.9 percent but the S&P 500 rose 1.0 percent and the STOXX Europe 600 rose 0.8 percent.

While Chinese authorities on Tuesday said deaths from the coronavirus epidemic rose to at least 106 and the number of confirmed cases in China rose to more than 4,500, some analysts think the impact on markets may be limited.

JP Morgan chief of global research Joyce Chang said that “the Chinese government has taken serious actions much faster this time” compared to the SARS outbreak in 2003 and “the mortality rate of the current coronavirus outbreak is 2-3% compared to +10% for SARS”.

Tuesday, 28 January 2020

Market tumble on virus fears may turn out to be “buying opportunity”

Markets took a beating on Monday, with the S&P 500 falling 1.6 percent and the STOXX Europe 600 and Nikkei 225 both plunging around 2 percent.

Markets sold off on concerns that the coronavirus outbreak in China will have a significant impact on the economy.

However, Robert Pavlik, chief market strategist at SlateStone Wealth, said that the selling “is going to turn out to be an overreaction”.

Indeed, a JPMorgan team led by Mislav Matejka wrote on Monday that past outbreaks served as “buying opportunities, rather than the reasons for sustained selling”.

Monday, 27 January 2020

How badly will China virus outbreak hit markets?

The coronavirus outbreak in China continued to spread over the weekend, with 2,051 cases of infection confirmed as of 26 January and the death toll at 56.

“According to recent clinical information, the virus' ability to spread seems to be getting somewhat stronger,” said China's National Health Commission Minister Ma Xiaowei.

While the S&P 500 fell 1 percent last week amid concerns over the outbreak, Mark DeCambre at MarketWatch noted that past outbreaks have not caused extensive losses in global stock markets.

DeCambre said that based on data from Charles Schwab, the MSCI All Countries World Index gained an average of 0.4 percent in the month after an epidemic, 3.1 percent in the ensuing six months and 8.5 percent a year later.

However, other analysts expect a more substantial impact on Asian markets, based on experience during the SARS outbreak in 2003/

Morgan Stanley analysts said the MSCI Hong Kong and Korea indices underperformed by 10 percent and 11 percent respectively as SARS escalated.

“The lesson from SARS suggests that the turning point for sentiment will come only after the number of new infections starts falling,” said Larry Hu, head of China economics at Macquarie Capital.

Some analysts say a significant impact on the US market cannot be ruled out.

“In a stock market where the dominant factor is price momentum, the impact of a change occurring in an external risk vector or a natural risk phenomenon is intensified,” said David Kotok, chairman and CIO at money manager Cumberland Advisors.

Saturday, 25 January 2020

Markets mixed as concerns grow over China coronavirus

Markets were mixed on Friday.

The S&P 500 fell 0.9 percent but the STOXX Europe 600 rose 0.9 percent and the Nikkei 225 rose 0.1 percent.

There were some positive economic data on Friday, for example, the IHS Markit US composite PMI hitting a 10-month high of 53.1 in January.

However, the spread of the coronavirus in China and to other countries continued to weigh on markets, with the former confirming 830 cases of infection and 26 deaths as of Friday.

Edward Moya, senior market analyst at brokerage Oanda, said that “concerns are growing that the travel bans in place will start to have a major impact on the economy”.

However, Venkateswaran Lavanya, an economist at Mizuho Bank, suggested that “panic is premature as evolving impact of the coronavirus remains to be seen”.

Friday, 24 January 2020

Markets mixed, WHO says China virus outbreak not yet a global health emergency

Markets were mixed on Thursday.

The S&P 500 rose 0.1 percent but the STOXX Europe 600 fell 0.7 percent and the Nikkei 225 fell 1 percent.

Worries about the China virus outbreak worsened after Beijing quarantined two cities but the World Health Organization said it is not declaring the outbreak a global health emergency yet.

The European Central Bank concluded its monetary policy meeting on Thursday with no change in interest rates.

It also launched a strategic review that will encompass “quantitative formulation of price stability, monetary policy toolkit, economic and monetary analyses and communication practices”.

Thursday, 23 January 2020

Markets mixed, “correction overdue”

Markets were mixed on Wednesday.

Asian markets rebounded from Tuesday's losses, with the Shanghai Composite rising 0.3 percent and the Nikkei 225 gaining 0.7 percent.

However, the STOXX Europe 600 fell 0.1 percent after US President Donald Trump threatened to impose high tariffs on imports of cars from the European Union.

US stocks were flat.

While China’s National Health Commission confirmed more than 500 cases of the deadly coronavirus, including 17 fatalities, Bethel Loh, macro strategist at ThinkMarkets, suggested that markets are considering the likelihood that “the situation will eventually return to normal, as it has historically”.

Nevertheless, Morgan Stanley said that “a correction is overdue, but will likely be contained to 5%”.

Wednesday, 22 January 2020

Markets fall as new virus spreads but “cash is trash”

Markets fell on Tuesday.

The S&P 500 fell 0.3 percent, the STOXX Europe 600 fell 0.1 percent and the Shanghai Composite tumbled 1.4 percent.

Markets fell after Chinese health authorities confirmed that a new virus that has killed four people so far in the country can spread through human contact just ahead of the Lunar New Year holiday.

“The ultimate fear is that this may spread with the tremendous human flow during the holiday,” said Alex Wong, managing director at Ample Finance in Hong Kong.

Declines in US and European markets were limited though.

“The reaction in markets suggests that the virus fears aren’t necessarily going to be the main story... not enough that good news wouldn’t break through and help them reduce losses,” said Connor Campbell, analyst at British financial spread better Spreadex.

Indeed, on Monday, the International Monetary Fund announced that it forecasts world economic growth to accelerate to 3.3 percent in 2020 from 2.9 percent last year, while fund managers in January were the most optimistic on global growth in nearly two years as they kept their cash positions at the lowest level since 2013, according to a Bank of America survey.

Bridgewater Associates founder Ray Dalio went so far as to say on Tuesday: “Cash is trash.”

Tuesday, 21 January 2020

Markets mixed, “steady-ish” US growth could keep stocks rallying

Markets were mixed on Monday.

Asian stocks mostly rose, with the Shanghai Composite up 0.7 percent and the Nikkei 225 up 0.2 percent.

However, the STOXX Europe 600 dipped 0.1 percent.

The US stock market was closed for a holiday.

Meanwhile, Michael Gapen, head of US economics research at Barclays, said that the US stock market rally is likely to continue.

“We’re kind of sitting at a trend-like outlook where growth is around 2% this year,” he said. “Our steady-ish as she goes trend-like outlook would be consistent, with say, equity market performance of around 8% to 9% this year given where we expect earnings growth to be.”

Monday, 20 January 2020

S&P 500 at record high as market in “euphoric mood”

The S&P 500 closed at another record high of 3,329.62 on Friday. It is now up 3.1 percent year-to-date.

As US stocks continue to rally, some think that they have become detached from reality.

“People are getting too optimistic in the short-term,” said Tom Essaye, founder of The Sevens Report. “We keep pricing in all this really good stuff that’s going to happen, but it has not shown up yet.”

“It just seems obvious to me that we’ve had a situation where earnings have gone nowhere and the markets have gone straight up,” said Matt Maley, chief market strategist at Miller Tabak. “I don’t want to call it a bubble yet but it’s moving in that direction.”

“The primary driving force behind the advance is increased liquidity/money flows — massive injections of funds into their systems by central banks,” said David Rosenberg, chief economist and strategist of Rosenberg Research.

“It appears to us that the market is letting itself slide back into a euphoric mood,” said Masanari Takada, macro and quant strategist at Nomura.

“Shorter-term sentiment is extremely optimistic,” said Ned Davis, senior investment analyst and founder of Ned Davis Research.

Saturday, 18 January 2020

US stocks hit another record high as housing starts surge

Markets rose on Friday.

The S&P 500 rose 0.4 percent to another record high, the STOXX Europe 600 rose 1.0 percent and the Nikkei 225 rose 0.5 percent.

US economic data released on Friday were mixed.

Industrial production fell 0.3 percent in December and the University of Michigans consumer sentiment index fell to 99.1 in January from 99.3 in December.

However, housing starts rose 16.9 percent in December, the fastest pace since 2006.

Mike Loewengart, vice president of investment strategy at E-Trade, said that the housing starts figure “blows expectations out of the water” and suggested that “it’s hard to argue that this expansionary phase can’t keep going”.

However, George Mateyo, chief investment officer at KeyBank, noted that the forward price-to-earnings ratio for the S&P 500 has reached 18.8, well above the historical average.

“We’re getting into thin air, so we might get a pullback,” Mateyo said.

Friday, 17 January 2020

As S&P 500 hits another record high, investors start to look elsewhere

Markets were mostly higher on Thursday.

The S&P 500 rose 0.8 percent to another record high, the STOXX Europe 600 rose 0.2 percent and the Nikkei 225 rose 0.1 percent.

US investor sentiment was boosted by positive economic data released on Thursday.

Retail sales rose 0.3 percent last month, claims for unemployment benefits fell last week for the fifth consecutive week and the Philadelphia Fed's gauge of business activity rose to 17 in January from 2.4 last month.

The National Association of Home Builders' confidence index fell one point to 75 in January from the previous month but remains near its highest reading since 1999.

A MarketWatch report said that “optimism is lingering for now”, and quoted Ciovacco Capital Management founder and chief executive Chris Ciovacco as saying that “the stock market made a cyclical low in 2018 within the context of a secular trend” and that “the secular trend could push stocks higher for another five to 15 years”.

Some analysts, though, note the high valuation for the US stock market.

According to Bank of America, the price-earnings to growth ratio sits at 1.8, its highest level since the firm started tracking it in 1986, while the price-earnings ratio is at 18.4 times, the highest since 2002.

“The S&P 500 is running on fumes,” said Bank of America equity and quant strategist Savita Subramanian.

This is leading some analysts to suggest looking elsewhere for investments.

“We would be looking more at international and emerging markets,” said Gary Hager, president and CEO of Integrated Wealth Management.

Thursday, 16 January 2020

Markets mixed as US and China sign trade deal

Markets were mixed on Wednesday.

The S&P 500 rose 0.2 percent to another record high but the STOXX Europe 600 was flat and the Nikkei 225 fell 0.5 percent.

Investors were encouraged by the signing of a preliminary trade deal between the US and China on Wednesday.

Wayne Wicker, CIO of Vantagepoint Investment Advisers, said that “while there’s a lot of room to go with additional discussions with China, what is happening today is a real positive step”.

US corporate earnings for the fourth quarter have also been coming in better than expected, with 77 percent of companies having exceeded earnings estimates so far, according to Michael Arone, chief investment strategist at State Street Global Advisors.

However, Arone also noted that “expectations bar has been lowered so much that it doesn’t take a significant amount of effort for companies to overstep it”.

Wednesday, 15 January 2020

US stocks pull back amid “elevated valuations”

Markets were mixed on Tuesday.

The S&P 500 fell 0.2 percent but the STOXX Europe 600 rose 0.3 percent and the Nikkei 225 rose 0.7 percent.

US stocks fell back after early gains following strong earnings reports from JPMorgan Chase and Citigroup.

Some analysts are warning of an overvalued US stock market, with the five biggest stocks dwarfing the rest of the market.

According to Goldman Sachs, the equity market cap-to-GDP ratio is above 200 percent and at an all-time high.

“Such elevated valuations in past periods have weighed on equity returns over the subsequent five years and lowered the odds of positive outcomes,” Goldman Sachs Investment Strategy Group CIO Sharmin Mossavar-Rahmani said in the group’s 2020 outlook.

Nevertheless, Goldman Sachs’ chief global equity strategist Peter Oppenheimer said the valuation expansion that drove the strong gains in 2019 should, based on history, lead to more gains this year.

In contrast, Doug Kass, president of Seabreeze Partners Management, said that 2020 could be when “the notion of mean reversion of returns finally surfaces”.

Tuesday, 14 January 2020

S&P 500 at another record high “experiencing lighter version of 1999 lunacy”

Markets were mixed on Monday.

The S&P 500 rose 0.7 percent to another record high while the China CSI 300 rose 1 percent. However, the STOXX Europe 600 fell 0.2 percent.

Arun Bharath, chief investment strategist at Bel Air Investment Advisors, said that the planned signing of a partial trade pact between the US and China is “a step in the right direction”.

He added that in the meantime, risk-on investments “are primarily being driven by a surge of global liquidity driven by central banks”.

Still, with the S&P 500 on a record-breaking run, many analysts are becoming concerned.

Last week, Lance Roberts at Real Investment Advice wrote that the market has been “overbought, extended, and complacent” over the last couple of weeks. He said “this is nuts” and reported taking profits out of portfolios on Friday.

A MarketWatch report noted that other analysts are saying similar things.

“The bullish sentiment we’re getting now has reached the uncomfortable stage,” Jeff deGraaf, chairman of Renaissance Macro Research, was quoted as saying.

Vitaliy Katsenelson, chief investment officer at Investment Management Associates, wrote in a MarketWatch article that the stock market is currently “experiencing a lighter version of the 1999 lunacy”.

Monday, 13 January 2020

Modest upside seen for US stocks, “excellent time” to move elsewhere

The S&P 500 rose 0.9 percent last week, touching another record high on Thursday.

Despite the high stock prices, analysts expect further gains ahead.

“The worst thing that clients and investors can do with the market at current levels is pull the plug and go underweight equities,” PNC Financial’s Amanda Agati told CNBC on Friday. “We still think there’s room for this market to move higher.”

Most, though, see only modest upside for US stocks this year.

“Tech, Health Care, Utilities, Financials, and Consumer Staples are all less than 5% below their price targets, which is a stark difference from last year when stocks were anywhere from 10 to 20% below their price targets,” Bespoke Investment Group said in a note to clients.

There may be better opportunities elsewhere though.

“If your asset allocation has significant domestic exposure and little-to-no international equity exposure, we think now is an excellent time to make a shift,” Bespoke Investment Group said.

Saturday, 11 January 2020

Markets fall as US reports slower wage growth

Markets were mostly lower on Friday.

The S&P 500 fell 0.3 percent and the STOXX Europe 600 fell 0.1 percent. However, the Nikkei 225 rose 0.5 percent.

A report on Friday showed that the US economy added 145,000 new jobs in December, fewer than the 266,000 gained in the previous month.

“While disappointing on the headline, today’s payroll miss is unlikely to change the outlook for the U.S. economy as the results are consistent with economic output chugging along at trend pace,” said Charlie Ripley, senior investment strategist for Allianz Investment Management.

Similarly, Ulas Akincilar, head of trading at online trading platform INFINOX, said that “at this stage of the economic cycle, the U.S. is still enjoying an impressively strong pace of job growth”.

However, he also noted a “slowing pace of wage growth” and said that “could steadily become a brake on the wider U.S. economy”.

Friday, 10 January 2020

Markets rise as investors focus on positive factors

Markets rose on Thursday.

The S&P 500 rose 0.7 percent to a record high, the STOXX Europe 600 rose 0.3 percent and the Nikkei 225 surged 2.3 percent.

Jack Janasiewicz, portfolio manager at Natixis Advisors, said that factors helping to boost markets include the US-China “phase-one deal that sounds like it’s going to be signed next week, global growth numbers that have been OK and highly accommodative central banks around the world”.

Oliver Renick said that economic data “are beating expectations by the biggest gap since early 2018 and on the longest win-streak since mid-2017” and that stocks ”remain resilient around risk-off events”.

Meanwhile, Nigam Arora said that popular technology stocks in particular are outperforming broader indices, and this outperformance is supported by positive money flows.

Thursday, 9 January 2020

Early gains by S&P 500 bodes well for 2020

The S&P 500 rose 0.5 percent on Wednesday, bringing the gains of the first five days of 2020 to about 0.7 percent.

US stocks rose despite Iran firing more than a dozen missiles at US military bases in Iraq on Tuesday.

“Much of this market serenity is owed to both sides signaling they don’t want to escalate matters any further,” suggested Marios Hadjikyriacos Investment Analyst at XM.

In the meantime, the five-day gain at the start of 2020 bodes well for stocks for the rest of the year.

When stocks finish that period higher, the S&P 500 has been positive 82 percent of the time at year-end with an average gain of 13.6 percent, according to the Stock Trader’s Almanac and CNBC calculations.

Wednesday, 8 January 2020

Markets mixed as S&P 500 faces “several market corrections”

Markets were mixed on Tuesday.

The S&P 500 fell 0.3 percent but the STOXX Europe 600 rose 0.3 percent and the Nikkei 225 surged 1.6 percent.

“We’re not surprised to see a bit of a pullback from the standpoint that through December the market got really overbought,” Bob Phillips, managing principal of Spectrum Management Group.

“A healthy domestic backdrop, coupled with the Fed on hold for the year, means that investors should buy any Iran-induced equity sell-off, barring a war that closes the Strait of Hormuz,” wrote BCA Research analysts in a Tuesday note.

Indeed, Blackstone’s Byron Wien thinks that easy monetary policy will help push stocks higher in 2020.

“Even though some observers believe valuations are stretched, a surge in investor enthusiasm pushes the Standard and Poor’s 500 above 3,500 at some point during the year,” he wrote.

Nevertheless, Wien said he expects “several market corrections” of at least 5 percent in the coming year.

Francois Trahan, head of US equity strategy for UBS, is more circumspect.

“We expect a V-shaped year for the S&P 500,” Tranhan said in a note, with the index dropping as much as 16 percent by May before recovering in the second half of the year.

Tuesday, 7 January 2020

Markets mixed but “bullish case does remain”

Markets were mixed on Monday.

The S&P 500 reversed early losses to close 0.4 percent higher but earlier, the STOXX Europe 600 fell 0.4 percent and the Nikkei 225 plunged 1.9 percent.

Investors in the US shrugged off continuing tension in the Middle East, with Sahak Manuelian, managing director of equity trading at Wedbush Securities, suggesting that investors are “really focusing on stock fundamentals”.

Also, Kristina Hooper, chief global market strategist at Invesco, said that the Federal Reserve is likely to continue to provide monetary policy support.

“The fact that the Fed is being very accommodative, in maintaining three insurance rate cuts, even though it looks like we are going to get a ‘phase one’ trade deal [with China] soon, suggests a very accommodative monetary policy in 2020,” she said.

Indeed, Lance Roberts at Real Investment Advice wrote recently: “The bullish case does remain as both fiscal and monetary stimulus remains excessively abundant.”

“This is why, despite excessive technical deviations, extraordinary complacency, and extreme bullishness, we remain allocated toward equity risk in portfolios currently,” he added.

Monday, 6 January 2020

Momentum driving S&P 500 but divergences and fundamentals pose concerns

The S&P 500 fell 0.2 percent last week, dragged down by a 0.7 percent decline on Friday after oil prices rose following a US airstrike on Iran.

However, Nigam Arora said that oil should not be the main concern for investors.

“The real danger to investors is not a war with Iran but the simple fact that this stock market is controlled by the momo (momentum) crowd,” he said. “The momo crowd is fickle and can easily start selling if momentum reverses.”

In the meantime, though, momentum in the market may be building. Ben Breitholtz, a data scientist at Arbor Research, analysed commentators on financial Twitter and found that typically pessimistic commentators are becoming less so.

Still, others have noticed that momentum is concentrated in the mega-cap technology stocks like Facebook, Apple, Amazon, Alphabet and Microsoft while the small-cap Russell 2000 index has underperformed.

“It is clear that the market’s idea of investing in 2020 is for all dollars to flow into the same five names,” wrote Mike O’Rourke, chief market strategist at JonesTrading, on Thursday.

This divergence between the top and bottom performers may be a cause for concern. John Hussman, president of Hussman Investment Trust, noted in his latest article that uniformity of gains among various market segments “is a hallmark of robust bull market periods” while a loss of uniformity “is the hallmark of a market that is losing its engines”.

Hussman also pointed out that market valuations are nearly three times the levels that have historically generated normal long-term returns.

Indeed, a CNBC article over the weekend said that high stock valuations are among risks for the market and quoted Societe Generale analyst Albert Edwards as saying: “The US equity market has become totally detached from underlying profitability.”

The article also noted that analysts have cut earnings estimates, companies are “piling on debt” and recession remains a risk.

Saturday, 4 January 2020

Markets fall after US airstrike on Iran and manufacturing contraction

Markets mostly fell on Friday.

The S&P 500 fell 0.7 percent and the STOXX Europe 600 fell 0.3 percent. Asian markets were mixed.

Oil prices rose after a US airstrike in Iraq killed Qassem Soleimani, leader of the foreign wing of Iran’s Islamic Revolutionary Guard Corps, and raised geopolitical tension. Brent crude rose 3.6 percent and West Texas Intermediate rose 3.1 percent.

“We believe that an Iranian retaliation is almost certain,” said Paul Sheldon, chief geopolitical risk analyst at S&P Global Platts.

Also weighing on markets on Friday was a report from the Institute for Supply Management showing that its US manufacturing index fell to 47.2 in December, its lowest since June 2009, from 48.1 in November.

While the ISM's manufacturing index has now shown six consecutive months of contraction, Nigam Arora does not think that the latest jump in oil prices will add much to the economy's woes.

“The lifeblood of the modern economy is semiconductors more than oil is,” he wrote on MarketWatch.

Friday, 3 January 2020

US stock market hits another record high as China eases

Markets rose on Thursday, with the S&P 500 rising 0.8 percent to hit another record high.

Markets rose after the People's Bank of China announced a 0.5-percentage-point cut in the reserve requirement ratio for commercial banks.

“The update from the PBOC helped Chinese stocks, and that positive sentiment spilled over to Europe,” said David Madden, market analyst at CMC Markets.

Alec Young, managing director of global markets research, said that “this is a liquidity-driven momentum rally” and “Chinese easing overnight has gotten it kicking into high gear”.

Thursday, 2 January 2020

US economy “less recession-prone”?

A CNBC article reports that Goldman Sachs is saying that the US economy is nearly recession-proof.

“Overall, the changes underlying the Great Moderation appear intact, and we see the economy as structurally less recession-prone today,” Goldman economists Jan Hatzius and David Mericle wrote.

The article did note that in late 2007, Goldman predicted double-digit percent gains for the stock market in 2008; instead, the S&P 500 tumbled 37 percent.

In contrast, the article reported that Philipp Carlsson-Szlezak, chief economist at AB Bernstein, said that “tight labor markets, easy policy, institutional risk tolerance, as well as potential further fiscal stimulus and certain debt growth” provide “fertile conditions for structural risks to build in the medium-term”.

The article suggested that investors “could be excused for getting a little nervous over such calls, as optimism also was heavy in late 2007, just as the economy was about to enter the worst of the financial crisis”.

Indeed, in his latest article, John Hussman, president of Hussman Investment Trust, reminded us that former US President Herbert Hoover had said in 1929 that “the fundamental business of the country is on a sound and prosperous basis” just before the Great Depression.

In contrast to the sanguine view of Goldman, Hussman thinks that with market valuations nearly three times historical levels, a market collapse is “baked in the cake”.

Wednesday, 1 January 2020

S&P 500 rises but starts 2020 “on perilous footing”

Markets were mixed on Tuesday.

The S&P 500 rose 0.3 percent, the Shanghai Composite rose 0.3 percent but the STOXX Europe 600 slipped 0.1 percent.

The S&P 500 ended the year up 28.9 percent, its best gain since 2013.

“While market volumes are predictably light, investors continue to strike a year-end cautionary tone as December optimism is gradually giving way to 2020’s uncertainty,” Stephen Innes, a market strategist at AxiTrader, wrote in a note.

Indeed, while many analysts see the market continuing to rise in 2020, most predict a weaker performance than in 2019.

In fact, Datatrek’s Nicholas Colas suggested that “by any objective measure US large-cap stocks start 2020 on perilous footing”.

“Valuations are rich. Corporate debt levels are at record highs. We have not seen any earnings growth in 4 quarters,” he wrote in a note.