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Tags: Insana | stocks | bull | market

Ron Insana: 'I Remain Convinced US Stocks Are the Place to Be'

By    |   Wednesday, 07 January 2015 09:51 AM EST

The S&P 500 index has slipped 4.4 percent since hitting its record high Dec. 29, as investors have panicked about plunging oil prices and political turmoil in Greece.

But fear not, says CNBC commentator Ron Insana. "I remain convinced that U.S. stocks are the place to be and that Wall Street is enjoying a secular, or long-term, bull market, based on a variety of positive influences," he writes in a commentary for CNBC.

And what are those influences? How about:
  • Historically low interest rates
  • Inexpensive energy
  • A manufacturing renaissance
  • Technological innovation
  • Accelerating growth
  • Decelerating deficits
  • A confident consumer
  • Washington working again [some may question Mr. Insana on this one]
  • More robust demand for residential real estate [the jury might be out on that one too]
To be sure, Insana is concerned about Greece exiting the eurozone and possible deflation in Europe's common currency area.

Also, not all the implications of falling oil prices are positive, he notes. "In addition to pushing oil-producing nations to the brink of bankruptcy, . . . it could lead to defaults on high-yielding debt used to finance speculative energy projects in the U.S."

But Insana remains bullish.

"I believe the U.S. will weather the storm, and suffer, at worst, a correction. But that belief is also predicated on the Federal Reserve NOT raising rates in 2015, by Washington developing a policy response to OPEC's assault on U.S. fracking fields, . . . and by the U.S. consumer using a lower cost of living to spend more in the months ahead," he explains.

"The market, it is said, climbs a wall of worry. Well, Wall Street is getting off to a worrying start. Hedging may be a good strategy in the days and weeks ahead," Insana adds. "For now, given the rapid pace of action, this feels more like a correction than the beginning of a bear market."

Jonathan Golub, chief U.S. market strategist at RBC Capital Markets, is also bullish on U.S. stocks.

"The U.S. is going to be a positive outlier, not only for the next year, but for the next decade," he tells The Wall Street Journal.

The Federal Reserve is expected to begin raising interest rates around mid-year, and many stock-market participants expect the tightening will put an end to the six-year bull market for equities.

But Golub disagrees. "There's this obsession with the potential headwinds from the Fed," he argues. "But we're talking about very good stock-market returns for two to three years from now."

The S&P 500 index generated a return of 13.7 percent last year, including dividends.

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Finance
The S&P 500 index has slipped 4.4 percent since hitting its record high Dec. 29, as investors have panicked about plunging oil prices and political turmoil in Greece.
Insana, stocks, bull, market
430
2015-51-07
Wednesday, 07 January 2015 09:51 AM
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