Stocks soared Monday as investors grew hopeful that the coronavirus outbreak was showing signs of a plateau.
“If the actual SEC were to come out and say ‘You know what? We need information and we’re not going to let these stocks trade until we find out if the Treasury owns them,’ but we’re in a tremendous period of laissez faire everything. So anything goes. … It’s kind of disconcerting to me that these stocks can trade when some people know the government is going to take a stake and others seem clueless. It doesn’t seem right to me.”
Former Federal Reserve Chair Janet Yellen still sees a rough road ahead for the economy.
“Probably now, if we had a timely unemployment statistic, the unemployment rate would probably be up to 12% or 13% at this point and moving higher. Other sectoral indicators, daily credit card data, other data that we have just show a dramatic decline in economic activity. Probably for the second quarter, at an annual rate, we’re going to be looking at a decline in GDP of at least 30%, and I’ve seen far higher numbers. So this is a huge, unprecedented, devastating hit, and my hope is that we will get back to business as usual as quickly as possible.”
Bob Doll, chief equity strategist at Nuveen, said that a “technical phase of the bear market” is in full swing, and gives his own advice for investors looking to weather the storm.
“The numbers are always different, but on average, stocks bottom four to five months before the recession does, and that would suggest that probably now is the time. So what I’m trying to do is reorder my portfolio. On big up days like [Monday], I’m more of a trimmer than an adder, and on big red days I hold my nose and I try to buy the things that I think are going to be in good standing when we come out of this.”