Stocks plunged more than 2 percent Monday as traders cashed in on some of the gains from the four-week rally. Earlier, the New York Fed reported its measure of manufacturing activity in the region moved into positive territory—signaling growth—for the first time since April 2007. Read and listen to what the experts had to say...
Dollar-Yen to Drag Stocks Down
The correlation between the dollar and the stock market is still there, said Chris Zwermann from Zwermann Financial. He sees the dollar-yen falling to 90 and pulling stock markets lower this week, with the Dow falling below the 9,000 mark.
Stocks to Rise Again Once Summer is Over
“We are in a summer lull. [Market] volumes aren't that strong. You can sense that the appetite has really faded away now that we've got through the majority of the earnings season," said Stephen Pope from Cantor Fitzgerald Europe. He expects to see stocks moving higher again once summer is over.
Pullback: A Normal Late-Summer Activity
Expectations have gotten a little bit ahead of reality as to where consumer spending will be post-stimulus, said Frederic Dickinson of D.A. Davidson. He said late August and early September are normally difficult months, especially when the markets went through a rally earlier in the year. “We were looking for the market to have about a 3 to 5 percent pullback and we’re getting that now,” he said. “But all in all, it’s normal late-summer activity.”
Hedge Funds Stage Rebound
Hedge funds have made their best start to a year in 10 years, with investors flocking back to traditional investment strategies, according to new research. “It’s a trend that we’ve been seeing,” said Karsten Schroeder of Amplitude Capital. “Outflows have certainly slowed down already in the first quarter of 2009, supported by a strong performance of the overall hedge fund sector.”
Markets Have a Memory
“There’s a saying that markets have a memory—everyone can see those most recent swing highs, which were November, and the longer-term players saw the November numbers,” said Denise Shull of Trader Psyches. “They started selling and then because we stayed there so long, a lot of shorter-term people got involved, creating resistance. You’ve got to get a lot of people on the other side of resistance to make it through, and we didn’t this time.”
Bankers, Journalists to Blame for Crisis?
Central bankers and financial journalists are to blame for the current financial crisis, according to Andrew Smithers, author of Wall Street Revalued. “The major blame for the current financial problems is lying about central banking,” he said. “I’m one of several people who pointed out before 2000 that the policies of the central bank in America was falteringand they were going to lead to severe problems—and they duly have.”
CNBC's Companies in the News:
Research in Motion
Bank of America
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