Photo: Bloomberg TV
Recently Nomura’s Bob Janjuah has made some sort-of bullish comments, suggesting that Bernanke would pump more money into the market again driving up risk assets.In an interview with Bloomberg TV he said his bullish stance is just for the short-term:
“It’s a short term tactical move recognising and reflecting I think the monetary anarchy that’s playing out. So just to summarize my view having got Q1 pretty spectacularly wrong, because completely misread the LTRO, the view here is that Q2 – 10 per cent correction which probably started a couple of weeks back.
So looking for the S&P straight down into the low 1,300s, high 1200s. Later in June or July a Fed twist -inspired rally which I think could take us higher than people expect into the election. But beyond that, bearing in mind the fact that global growth, including U.S. growth, is not self-sustaining, and the fiscal cliff ahead of us, my longer term secular bearish calls still hold: S&P around 800 target and DOW-gold ratio down at 1.”
Janjuah said the Fed is being cautious about more outright QE because it would send a negative signal to the real economy and drive up commodity prices. Janjuah went so far as to say that higher gas prices could impact President Obama’s re-election campaign and that the Fed was being influenced by what is going on in the Fed arena.
He added that using S&P as a proxy for global markets he says we’re no more than a third of way through what is likely to be a month or so of correcting markets.