Pros Say: Brace For a Possible Sideways Correction
Stocks pared their gains on Wednesday, as banks pulled back but investors remained hopeful that the worst may be over for the economy. Treasury Secretary Timothy Geithner told a Senate panel that financial markets are "starting to heal" and that a program to remove toxic assets from bank balance sheets would begin in the next six weeks. Read and listen to what experts had to say...
Sideways Correction May Disappoint Investors
Bruce McCain of Key Private Bank warned that contrary to the traditional downward movement, market corrections could also be sideways. “People looking for strong [downward] corrections may be disappointed and therefore may have a hard time struggling to catch up with the market as it begins to rise,” he said.
Significant Market Pullback in Six Months
Stephen Koukoulas of TD Securities said with housing starts at an all-time low and increasing unemployment rates, he still sees a lot of pessimism in the economy. “Our hunch is that the stock market will have a significant pullback in the next six months.” He said government bond yields are an attractive alternative for a safe haven.
GE CEO Supports Cap-and-Trade Energy Approach
There are a number of indicators showing signs of stabilization, said Jeff Immelt, CEO of General Electric . “The demand for commercial lending in small businesses has grown dramatically…I see that as a generally positive sign,” he said. He also supported the cap-and-trade approach to energy, saying it’s the “most effective way to create a market.”
(Editor's note: GE is the parent company of CNBC.)
Gov’t Program Starting to Work
The government’s program is really starting to have a positive effect, said Robert Wolf of UBS Group Americas. “The Fed, the Treasury and the FDIC brought stability in the markets,” he said. Although he doesn’t expect a market recovery until the end of 2009, “we now have some nice foundation to start one.”
‘Way Through’ the Worst of Housing
We’re “way though” the worst of housing, said Allen Sinai of Decision Economics, and predicted that home sales should bounce around the bottom for another 3 to 4 months. “I think we have started the early phase of a new equity bull market…that will come by the end of the year,” he said.
Botox as an Economic Indicator?
David Pyott of Allergan, the company famous for commercializing the anti-wrinkle drug Botox, said although the economy has had significant impact on surgical procedures, Botox has been quite resilient.“I think it’s ingrained in consumer practice,” he said.
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Bank of America
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