Are things finally looking up?

One analyst says the end of the tunnel is in sight. We examine the commentary piece.

Source: Today, 15/7/9, p.B8
Headline: Reflation, liquidity the way to go
Writer: By Bob Doll

Quote1
Global equity markets have been volatile this year. After sinking sharply in January and February, ... global equities went on a tear in the next couple of months -- but now it seems the rally that started in early March has run out of steam. ... Since the bear market began in earnest last September, ... there have been several global equity rallies that failed to take hold. ...

Comment1
These are assertions, with no supporting argument.

Quote2
The rally that started in March was different. That rally which, from trough to peak, has resulted in global price advances of around 30 percent, was based on a combination of technically oversold conditions, aggressive global policy actions and a general sense that the global economic recession was moving past its period of greatest weakness.

Comment2
Here is a claim of a different rally. The difference? A 30 percent advance, as contrasted with "rallies that failed to take hold". There is no explicit statement that the "combination" caused the rally.

Quote3
The extent to which equities are able to continue to advance will depend largely on the degree to which the global economy is able to recover. ...

Comment3
This sounds like it is true by definition.

Quote4
The massive policy initiatives around the world have begun to bear some fruit. The dramatic increase rate cuts, spending increases, tax cuts, capital injections, bank rescues and plethora of new government programmes have all helped to combat ongoing credit-related deflation risks.

Comment4
What are listed are the "massive policy initiatives". What are the "fruit"? We are not told.

Quote5
We believe the fourth quarter.... We expect a small gain.... We also expect to see modestly positive.... We believe equities are entering a correction phase.... We believe this correction will be marked....

Comment5
Here are more predictive assertions -- again with no supporting argument.

Quote6
We think it is extremely unlikely that prices will retreat back to their early March levels. Typically, such corrections result in a give-back of between one-third to one-half of recent gains which, in the US, would result in a short-term drop to between 800 and 850 for the Standard & Poor's 500 index. ...

Comment6
Here's the argument:

Reason: Typically, less than full corrections.
Conclusion: Hence, no full retreat to early March levels.

The success of this argument depends on the future being like the past.

Quote7
We expect improving economic conditions.... We believe that stocks will outperform....

Bob Doll is vice-chairman and global chief investment officer of equities at BlackRock.

Comment7
More predictive assertions -- and no supporting argument.

Comment8
The issue under discussion is one on which there are many differing expert opinions, unlike on the question of how long an object will take to fall 20 storeys. In this case, expert opinion alone is insufficient. Arguments must be provided (see Quote6 above).

END