Photo: Bloomberg TV
BMO’s chief investment strategist Brian Belski was on Bloomberg Surveillance this morning with Tom Keene discussing the rally in U.S. stocks.Keene asked Belski why, with Europe in the tank lately, U.S. equity markets seem unfazed.
Belski held up three fingers and said:
Three days left in the trading quarter. Three days left. What’s simply going on is a game of catch-up from instititutional investors.
It was buy the rumour, buy the news on QE3 – or QE infinity now, Buzz Lightyear to infinity and beyond – and clearly investors that we talk to are very surprised that August was not negative, came back to work after labour Day and bid the market up.
We anticipate still that our 1425 target at year-end is a good target. That does not make us bears; that does not make us negative.
Keene then asked Belski, “Does it make you go to cash? You’re there now. Pack it in.”
Belski said at this point, they would be taking some money off the table, given their year-end target for the S&P 500:
From our discipline – we’re going to stick to our discipline, which says 1425. So, we would take some money off the table. 1575 next year, though.
I think strategists come on and talk about timing the market – we’re at 1425, so we’d be taking things off the table and we’ll see what happens over the next five or six weeks. We think it’s going to be a noisy election season, and that’s going to cause some volatility short-term in the market.
However, Belski said that “longer term, U.S. stocks in particular still look very good from a fundamental perspective.”
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