Stock market outlook: not that great. I am seeing a lot of volatility, which doesn’t bode well. Investors don’t like volatility, and tend to respond by moving to safety. Interest rates have risen a little, but the economy still does not look strong. Man, this correction that began in 2008 is sure dragging on!
European stocks still have the momentum advantage. Having said that, they don’t have a great deal of momentum. Not to mention that my model, while performing quite well over 14 years, has recently shed a lot of value. It peaked on May 7, 2014 (beginning with a backtest going to Jan 1, 2000). In the ensuing year, it has lost about 30%. It has been very volatile, but never to this extent, especially when the TSX 60 was relatively stable.
In US stocks, WAG, UNH and BMY still appear relatively attractive. LOW has dropped off and been replaced by TGT.
In Canadian stocks, only VRX looks really attractive, and that comes mainly from a price spike in late February. Lately, the trend has been downward (or reversion to the mean).