We are probably in a recession right now: David Rosenberg
Investors should enjoy Thursday's uptick in market trading, as this positive momentum won’t continue next year, according to David Rosenberg, founder and president of Rosenberg Research.
“Enjoy today's rally, but it's probably going to be a rather brief affair,” Rosenberg said in an interview Thursday.
Rosenberg made the comments after a report from the U.S. Labour Department found U.S. inflation was up 7.7 per cent from the same time a year ago, which was the smallest annual advance this year.
Coming off the news, all North American markets gained in early trading. The S&P 500 jumped 3.6 per cent at the opening bells, which marked its biggest climb in two years.
“We'll forget about this (U.S.) inflation number in the next few weeks and we're going to start to see I think cascading negative economic data and earnings disappointments and downgrades-- and that's really going to be next year story for the stock market.”
Rosenberg said he thinks a recession is already starting and this could be bad news for investors’ portfolios since “stock markets don't like recessions.”
“The story next year won't be interest rates affecting the market multiple, it'll be the economy affecting corporate earnings, so there's another big down leg,” he said.
But Rosenberg isn’t the only investor that thinks we’re on the verge of another bear market rally.
“I think you're going to see markets rock and roll on this (U.S. inflation data), I think you're going to see the Canadian dollar continue to ascend,” said Dennis Mitchell, chief executive officer and chief investment officer at Starlight Capital, in an interview Thursday.
“But I do agree with Rosenberg, I think this is going to ultimately be another bear market rally that we should take advantage of to trim some of the weaker positions in our portfolio, and wait for another opportunity to add to the better quality names in our portfolios.”