Market Commentators Turning Bullish, the Futures are Open Reflecting this Optimism


Commentators from Morgan Stanley (NYSE:MS) to Eaton Vance (NYSE:EV) are encouraged by a combination of unprecedented government and central bank stimulus efforts, declining volatility and the Key: Signs that the coronavirus pandemic is peaking in parts of Europe.

There is light at the end of the tunnel but it’s still a long tunnel,” Erik Nielsen, UniCredit SpA’s London-based chief economist, wrote in a note Sunday.

Middle East markets were mixed Sunday after Russia and Saudi Arabia delayed a meeting aimed at ending their Crude Oil price war.

Following are comments on what may ahead for markets:

Eric Stein, the Boston-based co-director of global fixed income at Eaton Vance:

  • Given the actions of the Fed and other major central banks, many but not all of those acute financial stresses are behind us
  • However, we are not nearly out of the woods yet as investors, I think, have either moved or are transitioning to the start to focus on fundamentals
  • The selloff broadly last week was more market pessimism about both the duration of the economic downturn and potential shallowness of the recovery than the issues in repo markets, dollar funding markets, and Treasury markets
  • All eyes will clearly be on Covid-19 and the fallout each country is feeling as well as the policy responses

Mike Wilson, Morgan Stanley’s Chief US equity strategist, in New York:

  • With the forced liquidation of assets in the past month largely behind us, unprecedented and unbridled monetary and fiscal intervention led by the US, and the most attractive valuations we have seen since 2011, we stick to our recent view that the worst is behind us for this cyclical bear market that began two years ago, not last month
  • Current levels in equity and credit markets should prove to be good entry points on a 6-12-month horizon. Bear markets end with recessions, they don’t begin with them, making the risk/reward more attractive today than it’s been in years

Edward Bell, senior director for market economics at Emirates NBD PJSC in Dubai:

  • That oil prices could gain so much Thursday and Friday and it not be the dominant driver for financial markets suggests that attention remains fixated on the economic damage being wrought by the coronavirus pandemic”
  • President Trump’s plan, “where he ‘hoped’ that Saudi Arabia and Russia would cut production by as much as 10-M barrels a day, may not even be large enough to offset the enormous build in inventories this Quarter” resulting from a collapse in energy demand.

The futures are open and reflecting this optimism.

Have a healthy week, stay home and keep the Faith!

#Banks#Bullish#coronavirus#credit#Crude Oil#DIA#energy#EV#Fed#markets#MS#oil#pandemic#President Trump#QQQ#risk/reward#Russia#RUTX#Saudi#SPX#SPY#stimulus#stocks#USO#VXX