Seasonal sales in September are in full swing.
The S&P 500, the Dow Jones Industrial Average and the Nasdaq Composite suffered significant losses on Monday amid looming risks in the Chinese market, a key Federal Reserve meeting, a high number of Covid cases- 19 and a maturity close to the debt ceiling.
It was the worst day for the S&P since May and the worst for the Dow since July.
Market analysts largely viewed the sell as a chance to buy despite the risks involved. Here is what four of them told CNBC on Monday:
Ashraf Haque, senior portfolio manager at Sands Capital, has always seen an opportunity:
“We have had success in some areas and we have struggled with others, especially in the Chinese tech space. What we’re looking at are the fundamentals of these companies, and if you look at a company like BABA, the core business still has a lot of growth and there are other growth drivers like the cloud that are pretty early on. the market does a good job of discounting risk appropriately and again, focusing on business. We still believe that there are a lot of opportunities in some of the tech mega-caps. So wherever possible, we are looking for more opportunities in this space. “
Tom Lee, Managing Partner and Head of Research at Fundstrat Global Advisors, also saw the recent sale as an opportunity to buy:
“I think the markets kind of see this gigantic wall of worry… and I know people talk about Evergrande and the overflow like Lehman, but when I look at what the returns are doing, they’re pretty docile and the VIX isn’t really as nervous as it could be. I’m in the camp that this is going to turn out to be a really good buying opportunity. Now I’ve heard from Michael Santoli and I agree with him. I don’t think that means stocks find their bottom today or even tomorrow. But does the recovery [we’re] only a year after start or has pent-up demand run out due to real estate issues in Asia? I would say no. So I would consider sales like this or just some sort of large scale sale as a time to gradually add in knowing that it might not be at its low today. “
David Lebovitz, global markets strategist at JP Morgan Asset Management, expected volatility to last several weeks and eventually give way to a solid 2022:
“I think the first thing to recognize is that when it comes to pullback potential, yes, we’re due. The biggest peak-to-trough pullback we’ve seen in the S&P 500 to date is a 4. % vs. a long-term average of over 14%. And so when I think about volatility, volatility for me, increasing volatility, just represents a wider distribution of potential outcomes. And I think that’s what you see investors struggling Not only are they worried about the possibility of the two infrastructure packages going through, not only are they worried about the debt ceiling, but they are worried about the Fed and what the This week’s dot plot might signal about the future path of rates. And then you have Evergrande, which is really the icing on the cake. And so, I think it’s hard to pinpoint one thing in particular, but I believe we are in a cut here on the court s the next two weeks. That said, despi given some of the cuts we’ve seen in earnings guidance lately, the situation for 2022 still looks very strong and we remain constructive on risky assets over the medium term. “
Rick Rieder, BlackRock’s chief investment officer for global fixed income, said that while investors shouldn’t ignore the looming risks in the Chinese market, they could still strengthen their positions:
“I think you have to respect the news. … If you said to me: “What are the risks in the world today? China is great. The growth of the economy is slowing, the nature of the financial system and what has happened and you must respect this news. Listen, at the end of the day, one of the things that happens in the markets is clearing up prices are really tough. The level of conviction in the markets is low today and so you get news like this you need to take that into account. And that being said, are we going to buy things today? I think you can add a bit of paper to this market pressure a bit. “