Market Halfway Through Bear Cycle: Rosenberg

The stock market is still in danger of breaking through its March lows as the economy continues to struggle, economist David Rosenberg told CNBC.

An additional round of government stimulus is likely to have little more impact than "cushioning the blow" of unemployment that will "easily" break the post-World War II high of 10.8 percent in 1982, said Rosenberg, chief economist and strategist at Gluskin Sheff.

"Could we see a new low? Who's to say that we couldn't?" he said. "A lot's going to depend on the economic outlook. I don't think another fiscal package is going to save the day."

Some of Rosenberg's other points:

• The market is currently only half-way through a secular bear market that could last another nine years. "You've got to trade accordingly, because there's going to be huge spasms and rallies along the way," he said.
  
• Stocks have priced in an earnings level that probably won't be achieved until 2012, posing more danger of a move lower.
  
• The gap between the so-called "U6" unemployment rate, which entails virtually all jobless including part-time workers who want to work full-time, and the number the government releases is at its widest ever. That indicates that even when the outlook improves for companies they are likely to bring part-time workers to full-time status first before hiring new workers, which in itself indicates a protracted period of a high unemployment rate.
  
• Cutbacks at the state and local government levels as well as a massive reduction in household balance sheets pose further headwinds for the economy.

"There are secular changes taking place in the economy right now, and you really have to be braced for it," he said.