U.S. stocks are heading for a fall to below their lows of last March.
So says Albert Edwards in a recent research report. Edwards is an analyst and strategist with Societe Generale S.A., a major European financial services firm with headquarters in Paris.
The company was voted this year by an independent survey as the top European economics and strategy research firm, its third consecutive year as number one.
Edwards cites a weakening global economy in 2010 and overpriced equities as the causes behind the market dive he anticipates.
“Deep down even the fiercest equity bulls must surely be doubting themselves,” said Edwards, according to a report in Bloomberg.
“We will surely see much pain to come,” said Edwards, referring to equity prices for the next two years. “Recession will quickly follow recovery. Thinking the unthinkable has paid off in the last decade and should continue to do so.”
Although Edwards was voted second best strategist in the same survey cited above, his bearish outlook runs contrary to the median economist estimate in a recent Bloomberg survey.
Median estimates had the U.S. gross domestic product growing by 2.6 percent in 2010 and three percent in 2011.
“You can’t stop a train that’s being fueled by cheap money, said Mike Farr, president of portfolio management firm Farr, Miller & Washington, referring to the near-zero Federal Reserve target rate, quoted in The Wall Street Journal.
“We still have a day of reckoning ahead,” Farr added. “But that day is being delayed for now.”
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