Brown Brothers Harriman (BBH) Equity Brokerage Division announced today it has upgraded its equity market intermediate-term (six-month) rating to “Strongly Bullish” from “Moderately Bullish”, pointing to a variety of fundamental and technical indicators that suggest that a new bull market has started.
Most critical to the improved outlook is the rebound in money supply growth and liquidity, which increased BBH’s confidence in future economic growth and earnings gains. The immediate triggers for the equity market upgrade were technical in nature, including a successful test of the July low and a dynamic, broad based gain in stock prices in recent days.
“While many investors have been worried about the weaker economic and corporate profit stories that emerged during the summer, we have focused on the improving financial background because monetary indicators have long lead times and typically change direction ahead of standard economic data,” says Charles Blood, BBH Director of Financial Markets Strategy.
BBH also downgraded its intermediate-term (six-month) rating for bonds to “Strongly Bearish” from “Moderately Bearish”, citing the prospects for a stronger stock market and economy and a diminished likelihood of Federal Reserve interest rate cuts.