The Dow jumped above 9,000 Thursday as investors shook off a rise in jobless claims and focused instead on encouraging earnings from FordMotor and 3M. Additionally, existing-home sales rose for a third straight month, climbing 0.3 percent to a seasonally-adjusted rate of 4.89 million in June. Inventories fell 0.7 percent. Watch and listen to what the experts had to say...
Near-Term S&P to Peak at 1,000-1,100
"In the near-term, we're looking for equity markets to trade sideways to higherover the next month," said Benjamin Pedley from LGT Investment Management. He sees the S&P 500 index "peaking out" between 1,000 and 1,100. “We’re looking for further gains in the near-term on low volume, but after that, the likelihood of a modest selloff is quite high,” he said.
GDP Will Surprise in Q3-Q4
"In the second half of this year, we'll probably see the pace at which companies are slashing their inventories will slow down quite sharply,” said Brian Coulton from Fitch. “They may even rebuild some inventories and that is going to have a temporarily positive impact on the growth rate. So we might actually see some better-than-expected GDP numberscoming out for Q3 and Q4."
Ample Market Opportunities For Latecomers
“The current stock rally is based on sound fundamentals and we have a macro recovery which looks to be reasonably well-embedded and that’s shown with decent earnings recovery,” said James Bevan from CCLA Investment Management. He said there are still “ample opportunities” for people who are late to the “stock market party” to get in.
Period of Consolidation for the Market
The market is in a period of consolidation, said Alan Gayle of RidgeWorth Capital Management. “There was a big sigh-of-relief rally that took the S&P up over 35 percent—that was on the notion that the economy was not going to continue in its freefall," he said. "We believe the economy is doing a slow turn into the wind."
Topline Growth Will Be Next Step
We’ve come into the earnings season seeing some green shoots in the economy and it seems like the overall earnings is saying that may be sustainable, said Rob Morgan of Clermont Wealth Strategies. “But a lot of it is coming from cost cutting and so we haven’t seen much on the topline and that will be the next step,” he said. “At some point, topline growth will have to resume.”
Will Crude Demand Improve in 2010?
Right now, the fundamentals are quite weak and oil inventories are very high around the world, said John Vautrain of Purvin & Gertz. “Refinery runs are low, which is not good for the refining industry, but we should see softening in crude prices,” he said. “This year will be down, but next year, we’ll get a rise in global demand of 1 million barrels a day.” He said the demand growth will be primarily from Asia and the Middle East.
Obama in Health Care Hotseat
Sen. Judd Gregg (R-N.H.) said Obama's language remains very good and everyone agrees with what he’s saying vis-a-vis health care reform. “But if you look at the product being produced, it doesn’t meet the languagebecause it doesn’t cover everybody, it dramatically increases the cost of the government by over $2 trillion dollars, and people will lose their insurance,” he said.
Obama: Economic Recovery Depends on Healthcare
CNBC's Companies in the News:
- Ford Posts Profit After Restructuring; Shares Jump
- 3M Profit Surges Past Estimates; Shares Climb
- GM to Continue Talks with Magna, RHJ on Opel Bids
- NBC Closes Key Ad Deal, Boosting Industry Hopes
*General Electric is the parent company of CNBC.