According to David Rosenberg, a former chief North American economists at Merrill Lynch, the Standard & Poor’s 500 Index may fall beneath the 12-year low reached on March 9. Rosenberg’s rational is based on the fact that consumer spending has yet to recover from the longest recession since the 1930s.
From Bloomberg: “We have to get confirmation the March lows are going to hold,” Rosenberg, the chief economist and strategist at Gluskin Sheff & Associates Inc. in Toronto, said in an interview with Bloomberg Television. “The conventional view was the November lows were going to hold. As we found out in the opening weeks of March, no, those lows didn’t hold.”
The S&P 500 rallied as much as 24 percent from an 11-year low of 752.44 on Nov. 20 to Jan. 6 on speculation the economy will recover…Rosenberg said he doesn’t expect the economy to recover in the second half.
“I’m seeing no revival of consumer spending in the second quarter,” Rosenberg said.
The benchmark index for U.S. stocks has rallied 34% from March 9 through yesterday.