Credit Suisse is still very bullish. In a recent strategy note they highlighted 4 reasons not to let the bears get you down:
1) The outlook for corporate spending
Corporates are underinvested, with free cash-flow as a proportion of GDP at a record high of 4% of GDP and the investment share of GDP at a record low.
2) The outlook for employment
Our US employment model is consistent with jobs gains of about 100-125K per month in the US (equivalent to 1.2% growth in employment and roughly a 2% increase in consumption on an annual basis, assuming no change in the savings ratio and a slight increase in hours worked).
3) US housing affordability
Housing affordability in the US is high – and it is therefore hard to see a sharp downwards movement in US house prices (even though they may fall 5% in the second half of the year, according to our US homebuilding analyst Dan Oppenheim).
4) China should have a soft landing
We think China will have a soft landing, given that:
a) Inflation is abating
b) A fall in house prices is manageable
c) Long-term growth prospects are intact