Global stocks rose again Thursday as investors took heart from signs of improvement in the U.S. economy after the Federal Reserve tweaked its policy statement to say that the economic outlook was improving. But experts on CNBC were mixed on when the economy will recover.
Time to Buy and Hold
Stuart Shrimpton, director at Intelligent Investments, says investors are looking at a longer-term view now and are more willing to buy and hold assets until markets recover.
It Will Take Time to Resolve US Problems
It will take a long time to sort out the issues plaguing the U.S. financial system and Obama knows it, Gerard Lyons, chief economist & group head of global research at Standard Chartered Bank said.
Bullish on Distressed Debt
Distressed debt is the best area to invest in at the moment because it offers “equity-like returns with secured, debt-risk profile,” Robert Tomei, chairman and founder of Advanced Capital, told CNBC.
“We feel that is the most compelling space that you can be in, both on the corporate side and on the real estate side,” Tomei said.
Tomei warned that distressed debt is a “game of catching falling knives.”
Facing the Music
Obama needs to be more honest with the Americans about the outcome and consequences of this financial crisis, says Gerard Lyons, chief economist & group head of global research at Standard Chartered Bank.
US Economy Yet to Bottom
The U.S. economy has yet to hit bottom, says Diane Swonk, chief economist at Mesirow Financial.
US Economy to Resume Growth in Q3
The U.S. economy could return to growth by the third-quarter at the latest, believes Dariusz Kowalczyk, chief investment strategist at SJS Markets. He tells CNBC it will probably record an overall contraction of only 1.75% in 2009.
Tough Times for Consumers
Unemployment is going to rise sharply over the next 6 months and real interest rates will also rise, Roger Nightingale from Pointon York told CNBC. Both factors will impact consumers, he added.
RBA Unlikely to Embark on Quantitative Easing
The RBA is unlikely to move towards quantitative easing, believes Olivier Desbarres, director of FX strategy at Credit Suisse. He tells CNBC that this will ultimately support the Aussie dollar.
China's Market Rally Not Justified
Jerry Lou, China strategist at Morgan Stanley, says the rally seen in Chinese stock markets cannot last as the run-up has been propped up by explosive loan growth.
Overcapacity in China
Jerry Lou, China strategist at Morgan Stanley, says overcapacity in China's manufacturing sector remains a problem as demand is being created by government efforts.