The White House said Monday it was "very likely" to reach a deal with Congress to aid U.S. auto makers — providing Democratic legislators can offer specific terms. Meanwhile, more glum earnings and job-cut statements came from 3M, MetLife and Dow Chemical. Crunching these concepts together, experts told CNBC that the market is bottoming and the smart money is quietly starting to buy up energy, tech stocks — and airlines.
Trickle Money Into Bottoming Market
BlackRock's Bob Doll said his clients are split between those redeeming their investments, saying "I don't need this any more," and those who are hanging in there: "I've lost the money, but it is going to come back, isn't it?" He'd like to see a third camp: people putting money in. Doll is currently overweight in cash, but he's slowly putting money back into what he believes is a bottoming market.
Buy Now — Or Regret Later
Christopher Zook of CAZ Investments said that after two years of tip-toeing, the restraints are off: "Forget cautious, forget optimistic, it's just time to buy stuff!" He said he likes energy, particularly the oil service space; he's also bullish on some technology names and even some selected financials. He remains cautious on some of the money-center banks.
Bailouts to Drive Rebound in Next Quarter
Wachovia's John Silvia said the programs launched by the Treasury and the Federal Reserve, and the rescue mission for America's auto industry, will "put a limit on the downside of the economy." He sees the effects kicking in after the current quarter, driving the economy higher again.
Contrary View: Don't Trust This Bounce
George Dowd of Newedge said the current market reflects a "very strong bounce off the lows" — but he sees another drop likely, given Friday's miserable unemployment figures. On the plus side, Dowd said the market is encouraged by aggressive rate cutting by non-U.S. central banks, and by the prospect of bailout for U.S. auto makers.
Travel Industry's Bright Spot: Airlines (!)
The decline in travel over the Thanksgiving weekend was the worst since the September 11 terrorist attacks, according to Jeff Clarke of Travelport. The 17 percent year-over-year drop was felt across the board, hitting hotels and casinos hardest. The dollar's strength is making it worse, curbing the foreign-tourist trade. But he says the huge drop in oil prices will help generate some surprisingly good fourth-quarter numbers from the airlines.
CNBC's Companies in the News:
- General Motors
- Ford Motor
- Dow Chemical