Stocks opened lower Wednesday after a report showed a much sharper drop in durable-goods orders than expected. And a sharp selloff in China dragged on oil prices, which also weighed on the market. Mortgage applications also fell for the first time in four weeks. Read and listen to what the pros had to say...
‘Dramatic’ V-Shaped Recovery
"It's a dramatic V-shaped recovery," said Michael Browne from Sofaer Global Research. This is the first recession where we've had the technological facilities to take down inventory in manufacturing quickly “so that we can act aggressively,” he said.
Recovery Will Be Slow
There’s plenty of money sloshing around and you can see that lending hasn’t picked up. There is a recovery coming, but it will be slow, said Anton Schutz of Mendon Capital Advisors. "The market is starting to look forward [but] the consumer is still hiding. They're not spending—they're saving," he said.
Rally is Justified: Short-Term Bull
The rally is justified as we had a selloff just before earnings season and earnings expectations were reset very low—and most have beat expectations, said Richard Winsor of Threadneedle Asset Management. “There’s so much stimulus that’s been thrown at this market, and further news that can come from this market, that it can be extremelydangerous being offside cyclicals,” he said.
When to Be Risky, When to Be Defensive
The charts are “well-supported” overall, said Geoff Wilkinson from Mint Equities. “We saw the reversal 10 days ago and we’ve continued to build from there.” Investors do want to buy the market, but they're getting "a little bit cagey about their bets," so they are moving away from the high-beta stocks and moving back into defensives, he said.
