Spring has arrived on the stock market.
In interviews with CNBC, market analysts have widely said it’s time to put the saying to bed, encouraging investors to stay in the market for what can be a volatile month for stocks.
Jonathan Krinsky, chief market technician at Bay Crest Partners, said investors may just have to temper their expectations:
“Stocks aren’t the same as companies, just like the market isn’t the same as the economy. And if we go back to March of last year, when the market bottomed out, think about the bad news, think about the bad news. is going to continue to rise, and yet stocks had already reflected that and they rose from that point on. So, I think we’re in a bit of the opposite now. things are going well. They can keep improving a little bit, even, from here on a fundamental basis, macroeconomically. But stocks are smarter than that. They have incorporated that and that’s why they. have recovered so strongly so far.thought growth and value [are] sort of going to have this crescendo move where the two work together and it was going to be as good as it gets. “
Jim Lebenthal, partner at Cerity Partners, pointed out several potential catalysts that could fuel stocks this summer:
“You have to respect the price action last week.… That was frankly not good. It wasn’t terrible, but it was definitely ‘meh’. It was lukewarm after the explosion in the benefits of technology. So we are certainly not getting a catalyst for the benefits of technology. Now you have a bunch of industry and energy names reporting this week. I think they’re going to be good, but I honestly don’t expect a strong response from the market. I don’t think it’s fatal, though.… I don’t think it’s something where you have to make that sale in May, something I absolutely hate. I hate this adage. I don’t think it’s helpful at all. I think at worst you have a period of sideways consolidation here, but you go into the summer and get a little more clarity on the taxes for the next year as these negotiations go on. And you might hate that I say this, … but even though [Fed Chairman] Jay powell was very clear last week, I still think the market doesn’t believe it. And over the summer, if he were to start talking about reduction, now would be the time to do it. So maybe if it doesn’t, then the market will have a little more wind in its sails. “
Steve Weiss, chief investment officer at Short Hills Capital Partners, warned that the market was in “a period of digestion”:
“We are always anxious to decide how to invest in terms of the general market based on what Jim Lebenthal pointed out: the Fed. So you have [Omega Advisors CEO] Lee Cooperman with his interview, you have [Berkshire Hathaway CEO Warren] Buffett, you have [Berkshire Vice Chairman Charlie] Munger all shouted and said, “Hey, inflation is going to pick up.” No one sees it as transient except [Treasury Secretary Janet] Yellen and Powell and his Fed colleagues, and I think that’s the problem. Now going in there we have modest numbers [on Monday] in terms of economic reports, but that’s going to be a lot that we’re looking at on Friday in terms of payrolls. A million right now is the basic narrative. If we see a lot more than that or a lot lower then you might see marked action one way or the other. But with the insatiable appetite of foreign countries, sovereigns and corporations, for [the] US 10 years and other bonds up and down – we saw the auction – as long as the rates stay under control in terms of yields, not the Fed rate, you will get confirmation in the market and I think that the market will go up. But you can see it going down. “
Pivotal Advisors founder and CEO Tiffany McGhee said she would buy shares in May based on two principles:
“I think we need to pay attention to investor reactions. This is not only the good news, but how do investors see it and how do they react? So I am not selling in May, I am buying in done, and I’m looking at two things. The first is the ability to buy the things that I like that are on sale. It’s just very, very clear. Second, I also buy the stories that people don’t. don’t pay attention. So, again, we’re still in this stock picking environment. There are definitely some opportunities out there and you can’t describe it all as a whole [strokes] like the industry and things like that. It’s not the pure plays, but it’s really the larger themes that I pay attention to and look for those selected opportunities within those larger themes. “