Paul Krugman isn’t the only Nobel Prize-winning economist saying austerity measures are threatening to derail the economic recovery — not help it. Columbia University’s Joseph Stiglitz tells CNBC that there is a misconception that government cutbacks inspire confidence in the private sector. He says there is a “very high risk” of a double-dip recession, and says the U.S. needs to continue a program of monetary and fiscal stimulus, while changing its pattern of spending and taxation. It should focus on high-return investments like education and infrastructure, he says, and use more tax incentives to promote business investment.
Each week, we take a look at which stocks John Reese’s Validea.com Guru Strategy computer models have newfound interest in, and which they have soured on. Here’s a look at some of the stocks John’s strategies have upgraded or downgraded today. Several big names are among the movers, including Microsoft, Amazon.com, and AstraZeneca.
Barry Ritholtz, who turned bullish right around the March 2009 low and bearish shortly before the “flash crash” in May, is now sitting largely in cash — but says his best guess is that we’re in a “normal” correction, not something more severe. Ritholtz tells Yahoo! TechTicker that he’s 25% in stocks and 75% in cash. Right now, he says there’s a lack of clarity, consensus, and conviction in the markets, and he’s prepared to let the dust settle before making any big moves.
David Winters, whose Wintergreen fund has a solid market-beating track record, says that he’s seeing a lot of “fat, slow pitches” in the market right now, and that he’s particularly high on Asian stocks. “We’ve been more or less a net buyer recently,” Winters tells Barron’s. “What is just so striking is that you can buy great companies at the most reasonable prices I have ever seen. And most sentiment, especially in the West, is just not terribly upbeat. So you really don’t have a lot of people who want to buy stocks today, which creates a lot of fat, […]
Wells Capital Management’s Jim Paulsen says lower Treasury rates will have a positive impact on the economy in the second half of the year. Paulsen tells Bloomberg that with the market down 15% or so, Treasury rates falling, and corporate earnings continuing to climb, a bit of resilience from the economy should bring greed back to the market.