Pros Say: Downward Trend for Stocks is Over
Stocks rallied Monday after a pair of encouraging reports on the manufacturing sector, strong bank earnings out of Europe and news that auto sales got a boost from the "Cash for Clunkers" program. All three major indexes were up about 1 percent and the S&P 500 was hovering around the 1,000 mark, the first time it's reached that level intraday since Nov. 5. Read and listen to what the experts had to say…
Chinese Market to Dip, Taking US Stocks Down
“[China’s] been the strongest market on the planet and it bottomed in October of last year and went more or less straight up and it achieved a 100 percent move—and in one day had a 8 percent reversal,” said Robin Griffiths of Cazenove Capital.
He said the Chinese market islikely to fall further, dragging US stocks with it, with the S&P 500 possibly falling below 800. But US indices will rise again for a substantial amount of time, with the Dow estimated to rise to 1,250, he added.
Downward Trend for Stocks is Over
Stocks may be overbought, but there are concerns about trading against the current trend because it looks so strong towards the upside, said Richard Cunningham of Alecto Financial. "The major downtrend in equity markets is over—it's how you play the turnaround," he said.
Banks Lending Would Help Economy
Paul Donovan from UBS said he is looking for banks' willingness to lend, which he sees as unlikely at the moment. "From an economic perspective, if the banks aren't lending normally, the economy is not going work in a normal fashion," he added.
What’s Behind the Summer Rally?
“We’ve crashed in September and October and we’ve been forming a big bottom ever since—and I think it’s a bottom which we can now launch,” said James Paulsen of Wells Capital Management.
“There’s a legacy of doubt that’s been left by this intensity of crisis that we’ve been through—we’ve had at least three months of very good continuous information coming to Wall Street, Main Street and earnings saying that things are getting better and yet, there’s still so much doubt.”
Music Industry’s Record Year
Despite the recession, the music industry is having a record yearwith the live concert business more robust than it has ever been, said Joel Peresman of the Rock and Roll Hall of Fame. “People like to see live music—people have always liked to go out, buy tickets,” he said. “In good times and bad, I think people look to see concerts.”
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