Market Insider

Wall Street's collective forecast: More volatility

Pro sees volatility as buying opportunity
VIDEO3:5303:53
Pro sees volatility as buying opportunity

The increased volatility on display Tuesday, when the Dow industrials rallied as much as 282 points and fell 143, is the theme for equities in 2015.

Whether citing the Federal Reserve's pulling back on its quantitative easing, the European Central Bank adding stimulus or crude's extended decline, market analysts say the market's wild swings can be expected to continue.

"Without the Fed really acting as a consistent buyer of bonds, and the global deflation that seems to be intensifying, mainly outside our borders, we do think there are legitimate earnings concerns," Jim Russell, portfolio manager at Bahl & Gaynor, said.

"It could be any or none of those reasons, it just speaks to the fact that we came into year after five years of rallying equity prices and the market feels heavy, it is going to take a lot of push to get us into more consistently positive trajectory," Mark Luschini, chief investment strategist at Janney Montgomery Scott, said.

"Volatility has been our call for the year," Luschini said.

The Chicago Board Options Exchange Volatility Index, one measure of investor uncertainty, rose for a third session, adding 4.9 percent by the close.

"A reasonably sure bet in 2015 is greater volatility," Russell said.

But Wall Street's roller-coaster ride isn't necessarily a bad thing.

"We're back to more normalized markets; volatility is a sign of a healthier market," Chris Gaffney, chief market strategist at Everbank, said.

"It's still a very good environment for U.S. companies, with low interest rates, more consumer discretionary income and still no wage growth," Gaffney said.

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