...with earnings estimates still +13% for the coming year and consensus GDP forecasts lowered, but still well above 2%, then it is hard to build the case that we have seen anything near full capitulation. Not only that, but equity fund managers are only sitting at 3.8% cash ratios — in the 2001 and 2008 downturns, these ratios got as high as 6%. Now that is capitulation and we are not there yet.
Plus, keep in mind that we are in a secular bear market, which is constantly peppered with flashy rallies and significant setbacks. Japan, for example, has just posted its fourteenth(!) 20%-plus decline in the Nikkei index since the peak was turned in 21 years (and 77%) ago!
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