Monday's market is still feeling last week's pain, as lowered earnings outlooks add to the downward pressure from big bank downgrades. And forensic analysts continue to sift through the alleged Bernie Madoff fraud, asking: Can investors get anything back? But CNBC heard from experts who are anticipating an annual Santa Claus rally — and think it's crucial to buy oil stocks and other selected equities now.
True Believer: The Fear is Gone
Jim Iuorio of TJM Institutional Services believes in Santa Claus and a holiday rally. He's encouraged by comparing where the markets were a month ago and where they are today. He notes that the S&P is up 20 percent — and more importantly, volatility is off by a half.
Mandate For Equities?
George Dowd of Newedge said he doesn't expect banks to start lending money for at least another three months, although the cooling of the money market funds may force investors to seek riskier assets and turn back to equities. Former Neuberger Berman managing director Gary Kaminsky sees stocks moving sideways...for a while.
Buy Oil Stocks — While the Buying's Good
BlackRock's Bob Doll said $40 per barrel is "unsustainable on the low side," although prices might go lower before the rebound. He said what has surprised him most about the bear market is how fast it developed this time. He believes in a Santa Claus rally during this holiday-shortened trading week, because "up is better than down." (Check Oil Prices Here)
Joy in Mid-January; Then, Look Out Below
Art Cashin of UBS said there's talk that the week before the Obama inauguration will be an ideal time to get into the market, because the entry of a new president could trigger a "honeymoon rally." He also quoted speculation that after the Christmas sales, there will be retail bankruptcies. John Lynch of Evergreen Investments warned of new auto-industry trouble early next year, after time runs out on the current aid plan.
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