The CFA Institute held its Global Financial Crisis Roundtable Thursday, with institutional expert Theodore Aronson, Goldman Sachs’ Abby Joseph Cohen, bond expert Martin Fridson, and economist Jason Trennert speaking in a panel discussion moderated by The Wall Street Journal’s Jason Zweig. U.S. News & World Report’s Kirk Shinkle offers the following observations from the hour-plus discussion:
“Cohen made it clear she thinks that many (though not all) markets have fallen enough to make new opportunities attractive. ‘There is value being re-established,’ she said. All the analysts said the macro factors, including the incoming administration, will matter for markets. There, Cohen said Wall Street looks confident in the Obama Administration’s economic plan because his team shows ‘every sign of being more prepared than any other administration in history in terms of hitting the ground running.’ She also made a longer-term case for U.S. equities, saying today’s lower valuations are broadly compelling thanks to some enduring strengths in the U.S. economy including growth prospects bolstered by better relationships with Asia and our highly productive workforce.
“Trennert [of Strategas Research Partners] said that while ‘the economy is probably going to get a lot worse before it gets better,’ equities look ‘awfully close’ to the ultimate bottom in this market. He said that while measures like joblessness are likely to get worse, stocks almost always rebound before the economy turns. That said, unlike earlier recessions, this time around consumers are only now starting to quake following damage from a long, panicky year in the financial sector. If they cut back mightily on spending, expect pain to linger. His other X-factor, the velocity of money in flowing around the global financial system currently being led by the federal government, could make or break a recovery too. Still, when it comes to stocks, ‘we’ve probably seen the worst,’ he said.”
To listen to the full roundtable discussion, follow the “Launch” link on this page.
