On The Long Good Buy
This morning Goldman portfolio strategists Peter Oppenheimer and Matthieu Walterspiler made a bullish case for U.S. equities saying stocks are much cheaper than bonds. Jim O’Neill told CNBC he has been bullish on U.S. equities for a while:
“One is we have really low levels of bond yields, because many including policy makers do not believe things can ever return to normal. And the other one is we have people that don’t believe that world growth can do better than it did at point x in the past. Being mister BRIC in reality despite western problems the world economy’s growth rate is trending higher than it has been for 30 years of my existence. Put all of that together it is really bullish on equities.”
He said the three biggest risks to the equity market would be a sudden turn for the worse in America’s industrial arena which at the moment is seeing some structural improvements, rising oil prices, and if a change of heart from the Fed that would see a huge rise in bond yields.
Recently O’Neill said oil prices are his biggest concern, not Greece. He reiterated the argument that China is creating an economy the size of Greece every 11.5 weeks:
“Who cares about Greece? Who cares? So long as Italy is supported and Italy does the right thing people exaggerate still the global importance of all this stuff.”
O’Neill added that the structure of the European Monetary Union is flawed and many issues remain unresolved but he said he just didn’t buy the idea that any of that would be the source that put an end to the global bull market in equities.
On the BRICs
More to come…
- Goldman’s Jim O’Neill: Let Me Tell You About The ‘S&P 5-Day Rule’
- Goldman’s Jim O’Neill: Europe Needs Growth, Not Austerity, And The ECB Needs To Step Up
- Jim O’Neill: China Will Contribute More To Global Growth This Decade Than The US And Europe Combined