U.S. stocks and bonds? No thanks, says Grandich

A majority of analysts may have already dubbed it the “year of the stock” south of the border, but not everyone is convinced 2011 is going to be a banner year on U.S. equity markets, Peter Grandich included.

“While the after-effects of a Santa Claus rally can linger into the first few trading sessions of the New Year, I believe by years-end the market shall have gone nowhere fast,” the market pundit wrote in his latest Grandich Letter installment. “Those wishing to be significantly long general equities should look just about anywhere else versus the land of the dying empire known as the U.S.A.”

Mr. Grandich, who said 2010 was his best year ever, believes upside to U.S. stocks should be greatly limited as the country struggles to right its growing fiscal mess. That said, he doesn’t predict an outright collapse in U.S. stocks over the next twelve months thanks to QE2 and maybe even QE3 if the U.S. economy remains sluggish.

He said better equity opportunities can be selectively found in the Far East, South America and even Europe.

As for U.S. bonds, Mr. Grandich is equally bearish recommending investors stay away from all debt obligations, government or corporate, with maturities greater than two years.

“America has begged, borrowed and stolen its way to a debt it can’t possibly service over time,” he wrote. “While I don’t know the date and time, the world will awake one day to this fact and the bond market will have a day of reckoning unlike anything it has ever seen.”