In our view, the market remains in a Fed-induced, liquidity-driven bull market that is likely to stay in place until rising interest rates, higher valuations and too much optimism cause another bear market. This could potentially take place in the second half of 2011.
The market has weathered the near-term concerns it is currently faced with (Mideast upheaval, the disaster in Japan, and the European debt crisis) correcting overbought conditions and overly optimistic sentiment. We are not convinced we have the all-clear signal on these risks in the near term, but we view further pullbacks as buying opportunities. We expect interest rates to rise as concerns over Japan and the Middle East abate.
Kanaly Trust CIO James Shelton was a guest on CNBC “Squawk on the Street” this morning, and discussed these and other market viewpoints, live from the NYSE.
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