Stocks jumped on Wednesday following a slew of economic reports that fueled optimism that the economy is showing stronger signs of a turnaround. Readings on consumer prices, New York manufacturing, industrial production and mortgage applications each provided hope. Coupled with a fairly strong start to earnings season, investors continued a rally that began Monday, focusing Wednesday on technology leaders. Read and listen to what the experts had to say...
Expect a Bull Run By Autumn
We will get a bull run in the markets by autumn, said Clem Chambers of ADVFN. “I think we’ll see some good action before September comes,” he said. Although there is a dampening effect going on in the economy, it’s better than it had been in the past. “We will have volatility, but the worst is over so we will have a general move up over the period,” he said.
S&P to Remain Steady Until August
The S&P 500 is managing to hold at critical levels near 875 points, said Chris Locke of Oystertrade.com Management. "This general sideways trend and the market holding up could last into August," he said. “S&P at 875 remains a very critical area—If the prices break down through there, then we’re in for a further correction.”
Economy Over the Worst
We’re starting off earnings season in good shape, said Frederic Dickson of D.A. Davidson & Co. “I see the economy as finally stabilizing at a low level. We have volatility ahead of us, and I think that applies to tech as well, but the worst of the decline seems to be behind us,” he said. He expects the technology sector to be the market leader.
A Second Housing Bubble?
Robert Shiller, co-creator of the influential Case-Shiller Home Price Index, said another housing bubble could be looming. “We’ve developed a much more speculative attitude toward housing,” he said and suggested the need for a second stimulus package. “We still have fundamental problems—loans aren’t being made aggressively enough, the Fed has to continue what it’s been doing, and we’re still in a problematic economy,” he said.
- Mortgage Applications Rise as Interest Rates Tumble
US Dollar Likely to Remain Soft for Rest of ‘09
Clifford Bennett of Fxmax expects the U.S. dollar to be quite soft through the rest of 2009. “China has $2 trillion on their books to play with—that suggests that they are investing less and less overseas, [which] underpins the view that the U.S. dollar is going to be quite soft for the rest of the year,” he said.
Earnings Recovery? Not Yet
"There’s still a lot of bad news to come out for this particular quarter,” said Ashok Shah of London & Capital. “The real recovery in the earnings probably is not going to start until the next quarter and the one after that."
CNBC's Companies in the News:
- CIT Aid Package Outline Emerging
- Dell CFO Sees Hardware Upgrades Boosting Profitability
Bank of America