A pair of analyst notes make it fairly clear what’s on the top of the mind of big investors.
In a note, SocGen’s Michala Marcussen discusses the “top client questions”, most notably: How much strength does the US recovery hold?
Marcussen is rather bearish:
The US economy is delivering conflicting data signals; employment and survey data point to acceleration while GDP indicators point to deceleration. In a nutshell the recent retail sales data are consistent with our Q1 forecast of 2.0% for household consumption while external trade could detract as much as 0.75pp from the Q1 GDP print; we thus maintain our Q1 forecast of 0.8%.
Meanwhile, Nomura economist Lewis Alexander writes a note on “Impressions From Clients In Europe” and the gist is the same:
Clients seemed intensely focused on the U.S. outlook. A number of clients noted that they thought that the US outlook was the key to near-term trends in markets (and that after having focused almost exclusively on Europe for six months, they were glad to focus on something else.) Note that these views were expressed from the beginning of my trip, i.e., before the FOMC meeting and most of the sell-off.
And staying on the theme, last night we brought you the comments of Dan Greenhaus at BTIG, whose clients were also thinking (skeptically) about the rally.
For many, they simply don’t believe as much of this equity rally is based on “faulty” economic data, particularly in relation to one of two things; seasonal distortions skewed by the still lingering credit crisis and, perhaps more immediately, a warm weather which has biased many data points, specifically housing, to the upside.
The US economy it is.
Business Insider Emails & Alerts
Site highlights each day to your inbox.