Brian Belski, Chief Investment Strategist, BMO Capital, and David Rosenberg, Gluskin Sheff, appeared on Bloomberg yesterday, weighing in on markets and their similar calls but very different perspectives - both have been right in their calls - Belski says "our gut feeling is that the highs are in for the year" four of five months ahead of his call.
In addition, Belski believes equity markets will be driven by mulitple expansion from here on, and that despite lower earnings growth, the market will rise on account of higher quality, more stable earnings, that produce stronger cash flows. That said, he believes that retail investors will return to equities when they realize that they are losing money in bond funds, and the "greed factor" sets in, and "after two or three years of equities going up, that's when you'll see people getting back into equities..., but from a mass basis, a retail basis, we're still about two years away from that."
Rosie says its all been driven by QE, and on the other hand says that yields on 30-year bonds could continue lower below 2% (resulting in higher bond values, thus his call for investors to look at bonds for total return). Its math. As long as policy rates stay at zero, and inflation expectations remain where they are, and the Fed continues to buy bonds farther out on the yield curve, its a matter of time.