The Financial Post reports in its Thursday, Feb. 9, edition that with equity markets near record highs, there are concerns about a correction. The Post's Jonathan Ratner writes that Tony Dwyer at Canaccord Genuity is among those who anticipate a pullback. He estimates this "tactical correction" will fall between 4 per cent and 7 per cent. While Mr. Dwyer thinks the fundamental picture is "very positive," he highlighted indicators that suggest weakness is coming.
Mr. Dwyer says in a note: "Given the likelihood of a temporary pause in the upside given recent market ramp and subsequent high optimism, we are tactically market and sector neutral. We would look to become more aggressive as the market works off its overbought condition because our positive fundamental core thesis remains in place, economic data and EPS continue to improve, and nothing in our credit-based indicators suggest any significant and sustainable deterioration that would warrant a more defensive position."
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