Worst day of the month on the stock market Four experts share their strategy

Worst day of the month on the stock market Four experts share their strategy

Seasonal sales in September are in full swing.

The S&P 500, Dow Jones Industrial Average and Nasdaq Composite suffered large losses on Monday amid rising risks in the Chinese market, a major Federal Reserve meeting, high number of Covid-19 cases and a maturity close to the debt limit.

It was the worst day for the S&P since May and the worst day for the Dow Jones since July.

Market analysts saw the sell off as an opportunity to buy despite the risks. Here’s what four of them told CNBC on Monday:

Ashraf Haq, senior portfolio manager at Sands Capital, still sees the opportunity:

“We have had success in some areas and we have struggled with others, especially in the Chinese tech sector. What we see are the essentials of these businesses, and if you look at a business like Baba, the core. There is still a lot of growth in e-commerce and there are other growth drivers like the cloud that are very early stage. And then when you compare them to the valuation of their peers in companies in the developed world, they trade at a huge discount, so the market does a good job of discounting risk appropriately and frequently, by falling apart. focusing on business. We still believe that there are a lot of opportunities in certain tech mega caps. So wherever possible, we are looking for more opportunities in this space.

Tom Lee, Managing Partner and Head of Research at Fundstrat Global Advisors, also saw the recent sale as a buying opportunity:

“I think the markets see this huge wall of worry… and I know people talk about Evergrande and fallout like Lehman, but when I look at what the returns are doing, so they’re pretty docile and the VIX is’ really may not be so nervous. I am convinced this is going to be a really good buying opportunity. Now I have listened to Michael Santoli and I agree with him. I don’t think that means stocks find their bottom today or tomorrow too, but is it a recovery [we’re] Is only one year over or has stalled demand ended due to an asset crisis in Asia? I would say no. So I would consider that kind of massive sales or just massive sales to fully total up as a time that it can’t be down today.

David Leibovitz, Global Markets Strategist at JPMorgan Asset Management, expects volatility to last for several weeks and eventually consolidate through 2022:

“I think the first thing to recognize is that when it comes to the potential for withdrawal, indeed, we are owed. The biggest peak-to-trough pullback on record in the S&P 500 is the only one. 4% versus longer term averages of over 14%. And so when I think of volatility, volatility for me, increasing volatility, represents a wider distribution of possible outcomes. And I think that’s what you see struggling investors in the current environment. Not only are they worried about the ability to pass the two infrastructure packages, not only are they worried about the debt limit, but they are worried about the Fed and What can the dot plot this week don’t an indication to the future path of rates. And then you have Evergrande, which is quite on the cake. And so, I think it’s hard to pinpoint one thing in particular, but I believe we’re here for a few chops over the next couple of weeks. That said, despite some of the reductions we’ve seen in earnings guidance recently, for 2022 the picture still looks very strong and we remain constructive on riskier assets over the medium term. “

Rick Ridder, BlackRock’s chief investment officer for global fixed income, said that while investors should not overlook the risks posed by the Chinese market, they can still strengthen their position:

“I think you have to respect the news. … If you said to me: “What are the risks in the world today? China is big. The growth of the economy is slow, the nature of the financial system and what has happened and you must respect this news. Listen, at the end of the day, one of the things that happens in the markets is the rise in prices. Confidence in the markets today is low and if you get news like this then you need to take it into account. And that being said, are we going to buy some stuff today? I guess you can add a little paper on this market pressure.

Disclaimer

LEAVE A REPLY

Please enter your comment!
Please enter your name here