Noted investor and the publisher of The Gartman Letter, Dennis Gartman dismissed the latest warning on global economic weakness to come from the International Monetary Fund (IMF), saying he “paid no attention [to it] whatsoever.”
“I give very little credence to what theIMF says. I give far more credence to what FedEx says, what the railroad companies say, and the earnings outlook and expectations of the auto companies rather than the IMF,” Gartman told CNBC Tuesday.
FedEx and other multinationals including Hewlett-Packard have warned in recent weeks that the worsening global economic outlook has hampered their bottom lines.
The IMF said on Monday that it expected global growth to remain sluggish and lowered its growth forecasts blaming the looming U.S. fiscal cliff and the on-going euro zone debt crisis. (Read More: IMF Slashes Forecasts for Global Economic Growth.)
It added that the fate of the global economy lay in the hands of U.S. and European policymakers.
As earnings season gets under way, Gartman also downplayed the importance being given to earnings, claiming most downward risk had already been factored in to the markets.
“I am amused at how often and how much we pay attention to earnings. Wall Street has ramped down its expectations, I don’t think anyone is going to be very surprised,” he said.
Gartman rejected the impact of earnings from bellwether Alcoa — the world’s largest aluminium producer — which reports later on Tuesday.
Financials will be watched closely Friday when heavyweights JPMorgan Chaseand Wells Fargo report, however, Gartman said trading would be “demonstrably less important” to banking than it has been in the past.
“The value of banking going forward is that we’ll see a return to old style banking rather than the banking of the last few years, where it was predicated on trading. More about loans, who we’re lending money to, and my bet is that banks’ earnings will get better quarter-on-quarter,” he said.
Gartman, a veteran commodities trader, added that he was shorting oil due to a drop in demand for gasoline consumption.
“Demand is down everywhere, we’re simply driving less and less, and new automobiles are much better than the old ones and we’re finding crude oil everywhere,” he said.
He described the situation as “crude bidding for storage,” which he said was the marker for a commodity in excess supply.
—By CNBC’s Shai Ahmed; Follow Her on Twitter @shaicnbc