There’s got to be a bull case in here somewhere…

Just a few hours into the New Year and everyone is so negative. Maybe it’s because it feels like the world is falling apart, geopolitically speaking.  No, that can’t be it – the world is always falling apart.

Michael Hartnett at Bank of America Merrill Lynch is telling The Street that the bull case is that there is no bull case. Not kidding. “The best reason to be bullish right now is there are so few reasons to be bullish.” I think he gave Lewis Carroll an associate producer’s credit on this particular note.

Jeff Saut at Raymond James came up with a way to think positively about what’s going on right now…

I had dinner last night with Fidelity’s Dr. Claus te Wildt who has a pretty optimistic outlook. He said the U.S. has solved many of its long-term problems (peak oil, manufacturing jobs, housing bubble, over leveraged banks, the deficit is under control, balance sheets are strong, etc.) and with cash on the sidelines, an improving economy, and everyone cautious, it is the formula for a continuation of the secular bull market. He likes Technology, Financials, Consumer Discretionary, and Healthcare. And oh yes, he likes the high-yield complex (ex-Energy), because there is only a 2.7% default rate, and he sees no recession, a GDP growth rate of about 2%, and a very slow rise in interest rates, and with a 700 basis point spread above T’note yields, he expects decent returns from a well-managed, non-leveraged, high-yield mutual fund.

OK, so there’s something.


Morning Track
Raymond James – January 7th 2016

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