Is “Bob the Bear” turning bull? Appearing on Bloomberg T.V. on Wednesday, Bob Janjuah, global head of tactical asset allocation at Nomura International Plc, clarified his recent estimates that a rally in equities will extend into next year and the S&P 500 will hit 1,500 in the coming months.
“It’s a short-term tactical move reflecting the current monetary anarchy,” Janjuah said. “We believe we’ll see a 10% selloff of equities in Q2 and the S&P will be somewhere in the low 1,300s or high 1,200s.”
However, he added that a rally will occur in June or July as a result of some sort of Fed “twist,” a term that refers to the policy of selling hundreds of billions billion in short-term Treasuries in exchange for the same amount of longer-term bonds. The results from such a move could be felt into the election.
As for the longer-term outlook, Janjuah sounded much like his usual self.
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“Global growth, including U.S. output, is not yet self-sustaining, and we’re headed for the fiscal cliff,” he said. “A longer-term secular call still holds and we have the S&P targeted for 800 with the Dow down as well.”