David Rosenberg: Five reasons we haven't seen market bottom yet

The current combination of monetary and fiscal restraint … is without precedent back to 1960.

His Chicago Fed counterpart, Charles Evans, added that “we must be increasing rates the rest of this year and into next year.” So this move up in stocks and down move on the dollar is nonsensical. What happened to “don’t fight the Fed”? I guess it works in one direction for an Alfred E. Neuman equity market.

Third, the drop in inflation is nothing for equities to cheer about since it’s not being met with any shift in the Fed’s tone. There is an added element here of demand destruction in this newly found disinflation that works against, not for, corporate profitability. Look at it this way: every recession brings on lower inflation. And there’s never been a recession without a bear market in equities, and more often than not, that means down 30 per cent to 50 per cent from the peak.

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