U.S. stocks turned mixed Tuesday after a quick boost from a well-received Treasury auction. U.S. Treasurys rallied, adding slightly to their earlier gains after a solid auction of two-year notes. But it was a see-saw day, with any boost or dip quickly fizzling. Read and listen to what the experts had to say...
S&P to Hit 800 by September
Martin Marnick of Helmsman Global Trading said markets will drift lower and the S&P 500 will slide to 800 points by September. “We’ve seen the “sell in May and go away” scenario and it’s just starting to play out where we’ve seen volume start to erode on Wall Street,” he said.
Equity Markets Will be Higher in 3 Months
Equity markets will be higher in 3 months than today and leading indicators should surprise on the upside, said Joug Kramer, chief economist at Commerzbank. “Expect another 2 to 3 months of solid gains in leading indicators, which should be positive for equities, he said.
Investors Expect Flat Revenue Growth
“People are looking ahead to second-quarter earnings … and probably realizing that we’re going to get much of the same that we got in the first-quarter, which is generally flat to weak revenue growth,” said Steve Massocca of Wedbush Morgan Securities, in regards to the recent market downtick.
Credit Market Problems to Creep Up Again?
We are now returning to some distress in the credit markets, said Puru Saxena of Puru Saxena Wealth Management. “Take money off the table—the yen and dollar are getting stronger and the major world currencies and commodities are selling-off. The last few months have been a rally in risk. Everyone has been betting on hyperinflation, but we aren’t going to get any inflation in the next 6 to 12 months at least,” he said.
‘Summer Swoon’ Taking Over Economy
There are still significant headwinds in the economy and the ‘summer swoon’ will start in June, said Larry Hatheway of UBS. The data from the last couple of weeks have been more uneven—it’s getting harder to beat expectations.
A ‘Stock Picker’s Market’
This year’s market will be defined by both outsized gains and losses, said Brian Belski of Oppenheimer. “This is a stock picker’s market as people migrate back into companies that are fundamentally thriving through this recovery,” he said. “The last 10 years have been focused around macro variables—we think this whole market is all about fundamentals where valuation matters again as companies start to earn their way out of the recession.”
Mishkin on the Economy
Rise in long terms rates indicates an improving economy, but the federal government and Congress need to focus on long-run fiscal sustainability, said Frederic Mishkin, former Federal Reserve Board Governor.
Currency Outlook—Follow the Euro?
In recent weeks, the dollar had weakened, said Axel Merk of Merk Hard Currency Fund. “The reflation trade worked out well,” he said. “But now, the reflation trade which favors commodity based trades such as Australia and Canada is abating. And rather than flying back to the dollar, the money is flowing to the euro.”
Recession Sparking Global Unrest
The ongoing situations in Iran, North Korea, and Pakistan and Afghanistan are all great sources of concern and this complicates an already complicated situationsaid David McCormick, former Treasury Undersecretary for International Affairs. “There is a dangerous feedback loop where as political situation worsens the risk on capital flows and commerce and confidence in the market worsens,” he said.
Boom Time For Debt Collectors
As the credit crunch continues to bite, more businesses are turning to debt-recovery lawyers to extract late payments from clients. Claire Sandbrook, of Shergroup, said people are becoming less lenient with their debtorsand are insisting that payments are made closer to terms in a business-to-business debt situation.
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