The stock fell on Tuesday as Wall Street marked a year since the S&P 500 hit rock bottom after falling 30% in 22 days due to the Covid-19 crisis.
Here’s what the experts say about today’s markets.
Ryan Detrick, senior market strategist at LPL Financial, shares what historical comparisons indicate for future growth.
“We have a 76% increase in S&P in the first year, and this is the best first year of 2009, a little less than … 70% or more. But here’s the main point. At LPL Research, we took a look in all 30% of the bass markets since World War II. There were six of them, so we are not talking about 20% corrections, we are talking about the big ones as we had. The incredible … year two, which … starts today, it was higher each time, almost 17% on average, so what we’re trying to say to our more than 17,000 LPL consultants is this: This is still a young, booming market; this is still a young economic growth cycle It will be difficult; it will be agitated; it will not be easy. The average retraction in that year two is about 11%. So we would not be surprised if this were an above average jump, maybe you have an above average correction. But, a year from now, history tells us … we will probably have a rising market and higher prices. “
James McDonald, CEO of Hercules Investments, explains the recent market rotation.
“The energy behind the purchase and the bull market is finding a place to go. We saw the Nasdaq stop rising … We saw pressure on the Nasdaq. During that same period, the Russell 2000 had two extra legs up, and so we’re at a 52-week high at Dow, S&P, Russell. The Nasdaq’s weakening simply meant that the money went elsewhere, so we can call it a rotation or we can call it a continuation of the bullish energy we saw. “
Jim Cramer, host of CNBC’s “Mad Money” program, remembers how the markets reacted a year ago on Tuesday.
“[Treasury] secretary [Steven] Mnuchin at the time said that they were very close to getting a [stimulus] deal, but the Dow dropped 800 points. Apple closed that day below $ 1 trillion. Only Microsoft was a trillion dollar company. There were a lot of downgrades that day … but at that moment, we got the fork. What was screaming the loudest? Ok, Zoom, DocuSign, Teladoc, Etsy, Shopify, PayPal, Square. Those were on the move, those were going up, as people started to realize that there are two economies. “
Meghan Shue, head of investment strategy at Wilmington Trust, sees what is good and what is bad in these markets.
“We are very constructive in the stock market. I would say that there are some downside risks, but there are also some upside risks. So we are looking at earnings and revenue expectations at the general level of the index to return to pre-pandemic levels. in the next 12 months. But we are not seeing much incentive in terms of expectations for this return to pre-pandemic levels for some of the more cyclical sectors, so we think there is still a positive side in some of the cyclical areas of the market. “
David Bailin, chief investment officer at Citi Private Bank, breaks expectations for profit growth.
“We think the markets are estimating what profit growth will be this year. So, for example, it is expected … between 20% to 25% profit growth rate. When we look at 2022, we are still looking for Growth 12% to 15% profitability next year, and that would bring the S&P P / E ratio between 18.5 and 19, which I think is an acceptable level. So much of 2021 is priced now. When we think about areas of value in the market, there are many. I think there are areas in health, there are areas in growth and dividend actions. “
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