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Wall Street strategists are the most negative they've been on stocks since the bull market began more than three years ago.
The consensus view of U.S. equity strategists from major banks is for investors to allocate just 52 percent of their portfolio to stocks and the rest to fixed income, commodities or cash, according to a Bloomberg survey.
This is the lowest allocation for stocks since the nearly 50 percent level that the survey reached back in March 2009.“I’m with the strategists,” said Enis Taner, global macro editor at RiskReversal.com. “There are just too many warning signs from other markets like FX, Treasurys and credit.”
Consider all the bad news coming out: Greece is without a government and has everyone wondering if it will stay in the euro zone. China’s industrial output is expanding at the slowest pace in almost three years. Throw in spotty U.S. jobs data and a retail investor confidence hit from JPMorgan’s $2 billion trading loss and one has an environment not exactly constructive for stocks. “There are too many things to worry about for me to feel comfortable investing in risk assets,” said Jim Iuorio of TJM Institutional Services. “A deteriorating picture in Europe combined with a slowing domestic economy has me solidly cautious.”
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