What the Pros Say: S&P 890 Critical
Most global markets were up for a second day in a row on Tuesday, boosted by signs that government efforts to push down short-term lending rates were working as credit markets thawed.
The U.S. gained sharply at the end of the trading day Monday on comments from Federal Reserve Chairman Ben Bernanke that the country may need an additional stimulus package. But will more government intervention help? CNBC's experts weigh in.
More Downside for Stocks, More Upside for Bonds
If the S&P 500 falls below 890, then the index will have further to fall. As long as the German 2-year Schatz stays above 105, it will continue higher for the short term to 106.95, Roelof van den Akker, chartist at ING Wholesale Banking said.
Fed May Bring Rates Down to 0.75%
David Fernandez, MD at JPMorgan believes the Fed could bring interest rates as low as 0.75%, as it tries to shore up the financial sector. He gives his take on the U.S. authorities' rescue efforts to CNBC.
US Rescue Efforts Have Little Real Impact
The Federal Reserve and Treasury gave the markets what it wanted but Joshua Rosner, MD of Graham Fisher does not believe these rescue efforts will have a lot of meaningful, long-term impact.
Central Banks Need to Go Big
"In the short term they've got to go big … the market has become very addicted to announcement effects and like any addict they need progressively bigger fixes. If central banks were to deliver nothing or 25 (basis point interest-rate cut), I think the markets would kind of go, 'hold on, are you watching the same data we're watching,'" Daragh Maher from Calyon told CNBC.
Are Fiscal Packages Relevant?
While the world is plunging into a severe recession, politicians and central bankers can think of nothing more than irrelevant fiscal packages, Roger Nightingale, strategist at Pointon York said. He calls for more interest-rate cuts.
Don't Rely on Short-Term Debt
Building an entire commercial economy on the back of short-term debt is almost as crazy as building an entire real estate market on adjustable rate mortgages, says Joshua Rosner, MD of Graham Fisher.
Continue to Sell Into Rallies
Last night's rally on Wall Street is not the beginning of a bull market but just another bear market rally, believes Stephen Roach, chairman, Asia at Morgan Stanley. He tells CNBC that investors should continue to sell into rallies.
Bullish on Precious Metals
Silver prices could rally in the final quarter of 2008, predicts John Licata, chief investment strategist at Blue Phoenix. He is also bullish on gold.
Sell Rallies as Bear Continues
Investors should sell into any rallies during the ongoing bear market, Daphne Roth from ABN Amro Private Banking and Christian Blaabjerg from Saxo Bank told CNBC.
Microsoft: Winner of Tomorrow?
"The companies that have cash enough to finance their own operations, likeMicrosoft for example, they will be the winners of tomorrow because with this financial crisis we have had a paradigm shift in the way that we should look towards companies. Namely that cost of funds is now the major issue," Christian Blaabjerg from Saxo Bank told CNBC.
Still on the Defensive
Tobacco, pharmaceuticals, like Eli Lilly, Roche and Novartis, and agrochemicals still look attractive to Stephen Pope, chief global market strategist at Cantor Fitzgerald Europe.
Pope also likes Credit Suisse, HSBC and UBS in the banking sector.
Drugs Remain Safe
"Pharma is as close to a safe haven as possible right now. We might still see some slowdown in sales in the U.S. because of the high patient-co pace, and in the emerging markets as well, because these are cash markets and if people have lost money they might consume less drugs. But overall we will still see growth, positive growth," Birgit Kulhoff, pharmaceuticals analyst at Rahn & Bodmer said, adding that pharma companies also have solid balance sheets.