Pros Say: S&P Could Slump 100 Points
Stocks edged lower on Thursday at the open as the market gave back some of its gains from this week's rally. Investors weighed a mixed bag of earnings results against jobless claims data, including auto layoffs that were much less than typical for this time of year. Read and listen to what the experts had to say...
S&P Could Slump 100 Points
“We’re still in a recession,” said Marting Marnick from Helsman Global Trading. “I’m still very cautious as we go forward through the summer months. We have a lot of downward moves to come.” The S&P index could fall toward 800 pointsin the coming months as economic uncertainty remains, he said.
The Financial Crisis Isn’t Over
The CIT Group woes show that the financial crisis is not over and more write-offs are on the way, said Steven Roach at Morgan Stanley Asia. "You’ve got plenty more write-offs of bad paper to come," he said. "75 percent of the world’s economies today are still contracting and the biggest piece on the demand side of the global economy is the American consumer, who is dead in the water."
Good Earnings Aren’t Enough
“Overall, the [earnings] results are likely to be on par with the first-quarter, so the positive surprises remain relatively high and the negative surprises will reduce,” said Khuram Chaudhry from Banc of America Securities-Merrill Lynch. However, strong corporate earnings probably won't be backed up by earnings upgrades, which are the key to the outlook, he said.
Putting the ‘Fair’ Back in ‘Fair Trade’
The U.S. trade deficit has eased in recent months, and the Obama administration is hoping to close the gap further with an initiative to increase exports and crack down on nations that reject fair trade practices.
“We’ll negotiate new markets for America’s manufacturers and farmers, and we can also help create market access if we get our trading partners to live up to their commitments,” said U.S. Trade Rep. Ronald Kirk. “Today, we’re going to talk about new tools we’re going to utilize to do that—both in enforcement and application of those rules.”
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