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Stocks surge for the second day in a row — here's what to watch now

Stocks surge for second day in a row—Here's what three experts are watching now

Stocks soared for the second straight day Tuesday despite the growing coronavirus outbreak.

Three experts say investors should be watching this now.

Jeff Mills, chief investment officer at Bryn Mawr Trust, says the chances for volatility are high.

"I do see complacency in the market. I think you can point to a number of different data points, whether it's flows into SPY or the QQQs in the 95th percentile, whether you're looking at the options market, the put call ratio is still very very low. AAI came out with the survey yesterday, the lowest percentage allocated to cash in nearly two years, so I would not be surprised to see additional volatility here. So I wouldn't necessarily be chasing this higher and buying with both hands but what I would say is the market is not as stretched as it was, say, in the beginning of 2018."

Libby Cantrill, head of public policy at PIMCO, says Monday's Iowa debacle did little to clear the political fog.

"We've been talking with our clients about Iowa and New Hampshire, that even though they capture the imagination, from a delegates perspective they really don't matter. Now they came at it from a momentum and fundraising perspective, but what really does matter for the current investors and markets perspective will be March 3. March 3 almost 40% of the delegates will be decided. And we should either have a very good idea of who the nominee is or who the front-runners are. And if we don't, then we would say the chances of a brokered convention actually increase, and not many people are talking about a brokered convention."

Chetan Ahya, chief economist at Morgan Stanley, says the global economy should continue to expand once the coronavirus outbreak stabilizes.

"We just got the global PMIs data yesterday. And that was very strong. We had a one-point-plus jump in the global headline PMI, and we had 1.9 percentage point jump in the new orders index, which is a sub-index which is more forward looking. So we had pretty good data in terms of what's going on in the global economy before we got this virus ... You probably get the resumption of recovery as soon as the situation is controlled."