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'Of course it's a bear market rally': Famed economist David Rosenberg says investors are falling for a classic market trap a?? and warns 'there's not going to be much of a recovery'

'Of course it's a bear market rally': Famed economist David Rosenberg says investors are falling for a classic market trap a?? and warns 'there's not going to be much of a recovery'
Screenshot via Bloomberg TV



David Rosenberg — the famed economist and founder of Rosenberg Research — thinks the stock market is at a crucial juncture that's preceded sizeable drawdowns throughout history.




In addition to the historical precedent that backs his view, Rosenberg highlights the following reasons for his bearish outlook: the permanent loss of millions of jobs, an overvalued market, an increase in savings, and blown-out high-yield spreads.




There are other permabears that agree with Rosenberg's assessment of the market. John Hussman — the outspoken investor and former professor who's long forecasted a stock collapse — conveyed a similar view in a recent client note.




Without a vaccine for the coronavirus, Rosenberg thinks a strong recovery is doubtful.




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"Of course it's a bear market rally."
That's what David Rosenberg — famed economist and founder of Rosenberg Research — said on the "Things That Make You Go Hmmm..." series in response to the stock market's massive rally that kicked off on in late March.
"It is the classic, Bob Farrell, rule #8 that there are three aspects to every bear market," he said. "There's the initial plunge, the reflexive rebound, and then a long and drawn-out decline to the fundamental lows."
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