CNBC's Bob Pisani reports on what traders are telling him this morning:
Another buying opportunity?
The bulls on the trading desks, and even some strategists like David Bianco at UBS, are out saying that yesterday's 90% downside day is a blip.
Here's a summary of the arguments:
1) Most companies are meeting or beating estimates. S&P earnings so far up 5.9% for the quarter. Many strategists think it will go to 8%--and this is trough earnings! Pretty good. Big banks beat expectations by wide margins, but being sold off because of worries on credit exposure from LBO loans.
Today, banks, insurance and brokers are seeing an oversold bounce.
2) Long-term rates are back under 5%, and expectations for a Fed rate hike are now almost non-existant.
3) Credit is not drying up. It's just become a bit more expensive.
4) Strategic corporate acquisitions may well soon eclipse LBOs. Earnings trends are strong. Prices for financials are down, creating a value proposition tough to ignore. Buyback acceleration and M&A using corporate cash hoards may replace LBOs should they slow down.
Look at Ethan Allen: so-so earnings, tied to the housing slowdown, but the stock is up 8% because they announced 2.5 million share buyback, which is about 7% of the company's outstanding shares, and a dividend increase of 10%.