(Here’s CNBC Pro’s live coverage of Wednesday’s market discussion on market volatility.) On Wednesday, investors were wondering whether it’s time to buy the dip or brace for more pain ahead as they prepare for the worst of 2024 for stocks. Periods of volatility. The Dow Jones Industrial Average started the week down more than 1,000 points, and the S&P 500 had its worst single-day performance since 2022. Many investors are advising against buying dips just yet as they expect this period of volatility to last until at least October. Others began to nibble away and bet on an eventual return to new highs after some sideways trading. Follow the latest market discussions and reactions. All times are Eastern Time. 11:04 AM: Oakmark’s Bill Nygren remains bullish on value As the economy develops, Oakmark portfolio manager and CIO Bill Nygren is bullish on a range of value stocks. “I think it’s fair to say that you do need a good economic environment for banks to do well and for auto-related companies to do well. But I don’t think it needs to be to an incredible degree and the level we’re looking at today Nygren emphasized that companies such as General Motors are actively buying back shares, which will drive up the price of fair value companies in the market, and after the recent market correction, General Motors and Citigroup. Waiting for companies to become cheaper. The Oakmark fund’s top 10 holdings include Alphabet, financial firm Citigroup, Charles Schwab, General Motors and Deere — companies that Nygren is bullish on over the next five to seven years. Pia Singh 10:48 AM: Strategas remains ‘hesitant to be bearish’ despite forecasting further volatility ahead Increased market volatility will become the new normal, according to Strategas. “Because we believe inflation and inflation expectations are returning to mean levels, and the pace of globalization is slowing significantly, it is reasonable to assume that the ‘Great Moderation’ that began in the early 1980s has ended,” Jia said. Jason Trenert wrote in a report Wednesday. But he said, “With strong expectations for third-quarter GDP and earnings and low long-term interest rates, we remain reluctant to bearish despite the recent volatility.” He added that the sharp rise in the CBOE Volatility Index Elevations are often associated with buying opportunities. Trennert also noted that the S&P 500’s average trading range in any given year is 27%, while so far this year the broader market index has traded in a 17% range. This points to “further market volatility” ahead – especially as domestic and international political tensions persist. — Pia Singh 10:15 AM Citigroup says U.S. stocks will rebound while Japanese markets remain subdued. “We find that U.S. stocks are prone to rebounding even if international equities, including Japan, remain subdued,” strategist Alex Saunders wrote. This is partly because the bank expects the yen to remain strong, hurting Japanese stocks. This month, the yen has gained more than 1.8% against the dollar, although it fell 2% against the dollar on Wednesday. “Contemporaneous returns have been worse in a high-volatility environment, but the model is more positive on forward returns for U.S. equities and general fixed income,” Saunders said. — Fred Imbert 9:52 AM Barclays Buy Technology Emmanuel Cau, head of European equity strategy at Barclays, is overweighting technology stocks as the sector has fallen more than 10% from its all-time high just last month. The strategist expects continued volatility going forward, citing seasonal weakness. But with earnings remaining resilient and the possibility of a rate cut from the Federal Reserve supporting him, Kow said he expects the economy to be cooling rather than headed for recession. “Summer markets are notoriously difficult to navigate and the latest bout of volatility may have ripple effects in the coming days/weeks as hair removal may not be over yet. As a result, price action may remain volatile while the U.S. election may Keeping markets stable they remain vigilant into the fall,” Kaw wrote in a note on Tuesday. “However, taken together, we find that the recent indiscriminate selling is overstated and want to selectively buy the dip. We move to Overweight in Tech stocks following a 16% correction since mid-July “We’re buying tech stocks on the dip,” Kao said. — Sarah Min 9:45 AM There are plenty of reasons to be bullish on stocks long-term Nick Colas of DataTrek Research says there are “ample reasons” to be bullish on stocks after Monday’s decline “There’s plenty of room for the Fed to cut rates,” TechCrunch Lars in his morning notes. “The dollar and equities just passed the global stress test. S&P earnings/margins are strong and the former is at all-time highs. Volatility should peak this month. We respect the cautious message from the broader market but are bullish in the longer term,” he added. – Jeff Cox 9:33 AM Dollar gains likely to be ‘limited,’ strategist says The dollar rose again against the yen on Wednesday, but that doesn’t mean the so-called carry trade is over, Scotiabank said. Shaun Osborne, the firm’s chief currency strategist, called U.S. dollar trading “volatile” in a note to clients, adding that they may further liquidate their yen positions. “The U.S. dollar can regain some ground for now, but room for strength is still limited, and the economic and market outlook remains uncertain. The S&P 500 is close to 10% from its recent peak, which amounts to a good correction, but I think arbitrage given the market’s recent Yuan short positions remain large (and profit expectations for some stocks may still be high), and trade shocks may continue further,” the report said. Shortly before the New York market opened, the ICE U.S. Dollar Index rose 0.2% to 103.18. “The U.S. Dollar Index rally could extend into the 104 area in the short term, but the underlying trend remains weak and a rebound may attract better selling interest,” the Scotiabank report said. — Jesse Pound 8:59 AM Piper Sandler Chart Analyst Chart analyst Piper Sandler, who is betting the S&P 500 will eventually rally to a new high of 5,800, is not worried about the near-term pullback and says investors should “go with the flow” of things happening in the market last month, such as the turn to Smaller stocks. Craig Johnson and Scott Smith said in a note on Wednesday that investors should expect such a spike in volatility, which historically has Ends around October. The pair cited the steepening yield curve, a test of key market support levels and the relative strength of small-cap stocks as reasons to remain bullish. They maintained their year-end target for the S&P 500 at 5,800, which would represent a nearly 11% rebound from Tuesday’s close and a new record for the benchmark index. During the latest market pullback, the CBOE Volatility Index more than doubled to above 30, while the S&P 500 still managed to stay above its 200-day moving average. Since 1991, when the VIX breaks above the 30 level and the S&P 500 remains above its 200-day moving average, it tends to rebound three months later after some sideways trading. Basically this means that the recent panic has not hurt the market’s long-term trend. The firm said investors should embrace rotation into financial and industrial stocks, as well as smaller stocks. “The Fed is likely to cut interest rates at least once later this year, which has historically benefited small and medium-sized businesses,” the report said. — John Melloy 8:26 AM UBS says “the worst may not be over yet” According to UBS , there will be more pain. Strategist Shahab Jalinoos said rising signals from some indicators, such as high levels on Wall Street’s “fear gauge”, showed the market selloff was not over yet. The CBOE Volatility Index (VIX) was last hovering around 23 points. “We suspect more damage could be done in the weaker liquidity environment of the summer, a level of anxiety that could leave many on edge,” Jarinus wrote in a note on Tuesday. AM 8:20 Citi says it’s not yet safe to return to the stock market The stock market recovered some of its losses during Tuesday’s trading session, but that doesn’t mean it’s safe to return to the stock market, Citi said. “Positions in the S&P 500 and Nikkei were not overly tight to begin with, but at this stage, as of Friday, have only trimmed about half of their recent gains. For NDX and Kospi, position reductions have been smaller,” Strategy Division Dirk Wheeler wrote on Tuesday. “We believe position liquidation is not advanced enough to make it safe to re-enter the stock market,” he said. 7:59 a.m. Wolfe Research says the ‘bad news’ is back to bad news, according to Bad economic news is back as bad news for the stock market, according to Wolfe Research. Stocks have reacted favorably to signs that the economy has cooled for much of the year, as investors viewed the reports as signs that the Federal Reserve could soon cut interest rates. However, after last week’s disappointing July jobs report, investors are concerned that the economy is now cooling too quickly and could be headed for recession. “Our sense is that last week’s weaker-than-expected ISM manufacturing and non-farm payrolls reports have shifted the narrative back to ‘bad news’ is ‘bad news’ as investors begin to question whether the Fed’s several rate cuts will avert a wider The economy is slowing, Chris Senyek, chief investment strategist at Wolff Research, said in a report Wednesday.
ABOUT US
Our news website delivers comprehensive coverage on US news, economy, politics, and world events, ensuring you stay informed on the latest developments. We provide timely and accurate news to keep you updated on the most important stories. Stay connected with us for in-depth analysis and breaking news from around the globe.
Contact us: contact@realtimeheadlines.com
© Real Times Headlines - 2024 | All Rights Reserved