The Business Cycle Dating Committee of National Bureau of Economic Research announced that the previous recession officially ended in June 2009. Looking deeply into the data that come with the announcement, Investment Guru John Hussman declared we are “NotYet Out of the Woods” in this weeks’s Market Comment.
Hussman based his claim on two argument. First, he finds that monthly measures of GDP show deteriorating economic momentum, using the data provided by independent research firm James Stock and Mark Watson:
And secondly, he finds the persistently high level of weekly new unemployment claims is inconsistent with the expectation of robust payroll gains, which is historically correlated to a economic growth.
A week of market rally like last one will only make Hussman more conservative. As a result, he made the following assessment towards the market:
Read the complete Hussman Market Comment for this week.
Hussman based his claim on two argument. First, he finds that monthly measures of GDP show deteriorating economic momentum, using the data provided by independent research firm James Stock and Mark Watson:
And secondly, he finds the persistently high level of weekly new unemployment claims is inconsistent with the expectation of robust payroll gains, which is historically correlated to a economic growth.
A week of market rally like last one will only make Hussman more conservative. As a result, he made the following assessment towards the market:
Presently, our valuations measures suggest clear overvaluation (our estimated 10-year total return for the S&P 500, based on a variety of models including the operating earnings model presented a few weeks ago, is only about 5%-5.4% annually), market action is strenuously overbought, market internals are relatively positive, but economic pressures are still negative, and sentiment is once again bullish enough to define an "overvalued, overbought, overbullish" condition.
The Strategic Growth Fund is fully hedged at present..
Read the complete Hussman Market Comment for this week.
