Faber: Don`t Buy This Rally

Dr. Marc Faber, told investors today in a Bloomberg video interview to be cautious about buying stocks at current levels. As he mentioned in his 2010 outlook Faber says stocks are unlikely to reach new highs in 2010 and are more likely to correct further. He predicts the equity markets will end lower in 2010, but are unlikely to decline substantially due to government intervention:

“I would look at the market to close probably a bit lower than it started the year in 2010. Equally, I don’t think we have a huge downside risk. If the Dow and the S&P dropped, say 15-20 percent, in other words the S&P towards 900, I think there would be more stimulus and more quantitative easing.” Marc Faber in Bloomberg, February 22

In terms of the global economy, Faber also expects slowing growth. He says China is likely a bubble and that there is a 99% chance the economy will slow with a 30% chance of a full blown crash. He says the Chinese slow-down will have extremely negative impacts on the global recovery.

Related ETF`s: SPDR S&P 500 ETF (NYSE:SPY) ; ProShares UltraShort S&P500 (ETF) (NYSE:SDS) ; iShares FTSE/Xinhua China 25 Index (ETF) (NYSE:FXI) ;