Stocks slide amid rekindled coronavirus concerns. What to watch in the months ahead

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Stocks slide amid rekindled coronavirus concerns. What to watch in the months ahead (via TradingNation)

As Wall Street weighs the risks still facing stocks, here's what three market watchers predict will come next:Barry Knapp, managing partner at Ironsides Macroeconomics, laid out his strategy for the second half of 2020:

"It's still early in the business cycle. We've been saying that all along. March 23 was the start of a new business cycle from an investor perspective, so, I wouldn't make the switch from cyclical names to defensive names, but I would raise some cash levels here and look for a bit of weakness to redeploy that cash for a year-end rally. That's how I would tactically think about the next few months.

"If you remember anything from this quarter … it's about [being] less bad. That's the way I think the portfolio management team is looking at it. [For] the S&P, this is going to be the worst quarter. And … at earnings of $22 plus for this quarter itself on the S&P, that's equivalent to what we saw in the second quarter of June of 2010.

"The market has been telling you something that's really important. Technicals are really strong, which means to reverse it, you need a very big shock. I look at three possible – I want to say these are possible, these are risks to the scenario – sources of shocks. One is cumulative bankruptcies, because capital impairments hurt investors. Two is a big policy mistake. We don't renew some of the relief measures, for example.

 

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