Asian markets were down, but by much milder degrees than the huge swings that have rocked investors over the last six weeks.
“The market wants to see everything line up, and last week everything lined up,” said Nela Richardson, investment strategist at Edward Jones, referring to the unprecedented aid from the Fed and Congress. “Now that message is in line,” said Richardson. “All these things line up coming into this week, and that’s why you saw strong performance last week continuing today.”Some of Monday’s sharpest action was in the oil market, where benchmark U.S. crude fell 6.6% to $20.09 a barrel after touching its lowest price since 2002.
“We have to look at this rally suspiciously,” said Sam Stovall, chief investment strategist for CFRA. He pointed to prior bear markets where stocks rallied more than 20% only to fall to new lows. A bear market is usually defined as a long-term decline of more than 20% for an investment. Forced selling by investors needing to raise cash is easing, according to Morgan Stanley strategists. They say another pullback in stocks is likely, but current levels offer some buying points for investors willing to wait six to 12 months.
In a sign of increased caution, the yield on the 10-year Treasury fell to 0.70% from 0.74% late Friday.