“We certainly believe that the market is getting way ahead of itself now,” Alex Pire, head of client portfolio management at Seeyond, told Yahoo Finance. “There is this sort of cognitive disconnect between the way the market is functioning and what we’re hearing about the economy.”
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="On Thursday the S&P 500 (^GSPC) was about 29% above its March 23 low, while the Nasdaq Composite (^IXIC) erased its 2020 losses to close positive for the year. Paypal (PYPL), Peloton (PTON), and Twilio (TWLO) all touched new highs following their quarterly results.” data-reactid=”18″>On Thursday the S&P 500 (^GSPC) was about 29% above its March 23 low, while the Nasdaq Composite (^IXIC) erased its 2020 losses to close positive for the year. Paypal (PYPL), Peloton (PTON), and Twilio (TWLO) all touched new highs following their quarterly results.
“A lot of the companies that have been doing well are the kinds of companies that you would expect to do well in an environment where we’re all stuck at home,” said Pire.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="He notes markets are a forward-looking mechanism, however companies have been giving little guidance due to the pandemic.” data-reactid=”20″>He notes markets are a forward-looking mechanism, however companies have been giving little guidance due to the pandemic.
“Most companies are removing guidance. The only guidance that we’re getting is, ‘Well, Q2 is probably going to be worse.’ We’re not really getting specifics around what ‘worse’ might mean,” said Pire.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="He also highlights there is no COVID-19 vaccine yet, though encouraging developments are underway.” data-reactid=”22″>He also highlights there is no COVID-19 vaccine yet, though encouraging developments are underway.
“We’re a little bit too far into this rally at this point, and that may not be a very strong signal in my mind for investors to get in,” added Pire.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="[Read More: Stock market news live updates: Stocks rally despite another grim jobless claims report]” data-reactid=”36″>[Read More: Stock market news live updates: Stocks rally despite another grim jobless claims report]
Pire says the Federal Reserve interventions and government stimulus will keep the markets from retesting the March 23rd lows.
“Now do we retrace 10, 15%? That’s a high potential,” said Pire. “We’re expecting a small retracement at some point, some elevated volatility over the next few months, probably 6 to 12 months.”
<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The market ‘has shaken off bad news fairly easily’” data-reactid=”39″>The market ‘has shaken off bad news fairly easily’
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="April’s jobs report due out on Friday is expected to show the ’horrific’ impact of COVID-19 on the economy. Pire wouldn’t be surprised if the markets shrug off the expected double-digit unemployment rate.” data-reactid=”40″>April’s jobs report due out on Friday is expected to show the ’horrific’ impact of COVID-19 on the economy. Pire wouldn’t be surprised if the markets shrug off the expected double-digit unemployment rate.
“Even if the news is negative meaning – its another poor unemployment number, it provides information to people and I think it gives a sense of relief in a way,” said Pire. “The market has been very very resilient and has shaken off bad news fairly easily for the past month or so.”
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Another 3.169 million Americans filed for first time unemployment benefits last week, bringing the latest 7-week total to more than 33 million.” data-reactid=”42″>Another 3.169 million Americans filed for first time unemployment benefits last week, bringing the latest 7-week total to more than 33 million.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="
Ines covers the U.S. stock market from the floor of the New York Exchange. Follow her on Twitter at @ines_ferre” data-reactid=”43″>
Ines covers the U.S. stock market from the floor of the New York Exchange. Follow her on Twitter at @ines_ferre
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Read more:” data-reactid=”44″>Read more:
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Warren Buffett: “Thank you Dr. Fauci”
It would be unprecedented for a bear market to be this short: Wells Fargo Strategist” data-reactid=”45″>Warren Buffett: “Thank you Dr. Fauci”
It would be unprecedented for a bear market to be this short: Wells Fargo Strategist
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Recent rally could be a ‘bear market trap’: Miller Tabak Strategist” data-reactid=”46″>Recent rally could be a ‘bear market trap’: Miller Tabak Strategist
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="A view from the trading floor: Algorithms having ‘outsized impact’ amid coronavirus impact” data-reactid=”47″>A view from the trading floor: Algorithms having ‘outsized impact’ amid coronavirus impact
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Find live stock market quotes and the latest business and finance news” data-reactid=”49″>Find live stock market quotes and the latest business and finance news
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and reddit.” data-reactid=”50″>Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and reddit.
Add Comment