Shades of 2022. Why this veteran strategist is 'max bearish' on U.S. stocks – MarketWatch

We are also on the bearish side of that. today's call Veteran strategist David Rosenberg said the firm is now “maximum bearish” on U.S. stocks, citing some recent issues.

“The setup for 2024 is eerily similar to when we entered 2022, with positioning, sentiment and technicals all at extreme values, consistent with what we saw in December 2021 (and fundamentals are deteriorating)
boot),'' the president of Toronto-based Rosenberg Research and his team, which includes Marius Jongstra and Bawana Chhabra, said in a memo.

The S&P 500 SPX ended 2022 with a 19% decline, its biggest decline since 2008.

Here is Rosenberg's chart:

Mr. Rosenberg's bearish views last year included forecasting a 30% decline in stock prices in early 2023 and forecasting a prolonged recession. But he predicted in September that the Nasdaq would hit its all-time high between December and January, and judging from its performance so far this year, the Nasdaq may be on the right track.

So where do you hide for now? The strategist believes that Treasury, which is scheduled to report results this week, is clearly the top choice for investors and the cheapest in terms of valuation. “Historical analysis shows this group has had strong performance during both Fed hiatus and deflation periods,” he said.

“Recession risk certainly looms over the sector, but behind the scenes investors are focused on large banks (well-capitalized) and insurance companies (steady earnings growth, higher valuations),” Rosenberg said. I can do that.''

And outside of financials, energy, communications services and utilities are all tied for second place, strategists say.

He also weighed in on bonds, saying the market has priced in about six Fed rate cuts, and a significant portion of the pivot calls are already “priced in.” Other headwinds include a 10% rise in the 10-year Treasury since October. While he's not recommending selling, he says it may be time to “consider the market movement.”

“Since the payment of the prepaid national tax is still continuing, [approximately] 5.25%, investors could consider locking in these yields following the rally experienced so far on the long end. ”

read: Former bond magnate Bill Gross says 10-year Treasuries are 'overvalued'

Rosenberg also said the market turned positive on commodities in December, with model scores reaching their highest since July 2022. However, they prefer food/agriculture such as wheat, cotton, corn, and soybeans, so energy other than natural gas is not considered. At the top.

The strategist said he timed gold's bullish turn well last fall, but hopes are fading due to investor concentration and overbought technicals.

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