Tags: Bob Doll Buy Dips | Oil Not Yet a Problem

Bob Doll: Buy Dips, Oil Not Yet a Problem

Friday, 04 Mar 2011 08:19 AM

Rising oil is not likely to derail the global economic recovery, and investors should look at declines in stock prices as a chance to buy dips, says Bob Doll, chief equity strategist at money manager BlackRock.

Oil matters, says Doll, but the world’s central banks remain “accommodative” and the economic data supports the notion that growth is speeding up, he writes in a note to clients.

Even if oil goes higher, it won’t mean higher inflation in the developed world, where only a small percentage of income is spent on food and energy.

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Bob Doll
“While higher food and energy prices are causing problems in several emerging economies, we do not expect to see a spillover effect into the United States or most other developed markets,” Doll writes. It would take a serious plunge in the dollar to create inflation here, he says.

Stocks, while “not as cheap” as the March 2009 lows from which they have doubled, are in good shape to continue their bull run, Doll says. More “turbulence” is likely, but investors shouldn’t cut and run, he advises.

He sees stocks holding up for years to come. “Absent an additional major spike in oil prices, we expect the global economic recovery will continue. This backdrop, combined with low inflation in most markets, should be conducive to continued strong equity market performance, and we continue to expect stocks to outperform Treasurys and cash over the next several years,” Doll says.

A strong private jobs report surprised the market Wednesday, bolstering stocks despite oil headlines. Payroll processor ADP said that companies added 217,000 jobs last month. Analysts had predicted 180,000.

Current official unemployment stands at 9 percent. The next government jobs report is due Friday morning.

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Rising oil is not likely to derail the global economic recovery, and investors should look at declines in stock prices as a chance to buy dips, says Bob Doll, chief equity strategist at money manager BlackRock. Oil matters, says Doll, but the world s central banks remain ...
Bob Doll Buy Dips,Oil Not Yet a Problem
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2011-19-04
 

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