Marc Faber : The Markets are no longer Oversold

Marc Faber : Well, we have to distinguish several factors. First of all, on QE1 the market in March 2009 was unbelievably oversold and so the market was ready for a rebound and as you know that if you print money, it goes somewhere and in the US it went principally into equity prices and into corporate profits. We have record corporate profits which is unusual because revenue growth is actually very disappointing, very little revenue growth. But there are record profits and I do not think these profits are sustainable.

Moreover, the markets are no longer oversold. We are above 1400 on the S&P and compared to other markets in the world, say if you compare the performance of the US stock markets to foreign markets, over the last 18 months in early 2011 the US market had outperformed just about anything else and therefore actually by international comparison the US market is quite high and my view would be every central bank will print money, including the ECB, directly or indirectly, whatever they may call it, but they will do it. The European markets, some of them like France, Italy, Spain, Greece and Portugal, two months ago were either below the 2009 low or close to the 2009 low on the S&P that would be the equivalent of 666. So relative to other markets, some European stocks are now very inexpensive. - in Economic Times India
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