Emergency rate cuts won't be enough to save the unstable stock market, top market strategist warns | Markets Insider
Traders are boosting their bets on central banks cutting rates as coronavirus deaths spike, but such policy won't do much for stock markets, Seema Shah, chief investment strategist at Principal Global Investors, said Monday. Rate cuts primarily strengthen borrowing and, in turn, demand. Such policy won't insulate markets "against supply-side concerns," Shah wrote in an emailed statement. Investors should pivot to protecting their portfolios and avoid buying stocks at lower prices, she added, as markets have already demonstrated "over-complacent" behavior toward coronavirus news. Shah recommended investors watch European companies for profit warnings, as the export-heavy economy faces great risk from a manufacturing slowdown. Visit the Business Insider homepage for more stories.
Investors looking to buy stock during Monday's dip shouldn't expect much help from central bank policy, Seema Shah, chief investment strategist at Principal Global Investors, said Monday. Traders are boosting their bets on central banks cutting rates as coronavirus fears roil markets. Lower rates bring cheaper borrowing, and cheaper borrowing often brings increased spending. Investors are betting on two interest rate cuts from the Federal Reserve in 2020, according to Bloomberg, but Shah doesn't think such action would provide markets with the cushion many are looking for. Rate cuts might provide a small boost to demand, but coronavirus' hit to global supply chains isn't easily averted and can drag stock prices lower, the strategist said. Apple warned on February 17 that its next-quarter revenue will land below initial guidance as "temporarily constrained" iPhone supply and weak demand in China dented sales. Other companies including Tesla, Starbucks, and Nike have alerted investors to earnings risk related to the outbreak. The market just learned that rate cuts won't "insulate it against supply-side concerns" and push stocks higher, Shah said in emailed comments. "While further Fed cuts, and potentially an ECB cut, may be priced in, easier liquidity conditions may be insufficient to prop up equity markets if coronavirus concerns continue to escalate," she wrote. "Monetary policy is not optimized for addressing a shock such as this." Global stocks tumbled in Monday's trading session after a spike in virus-related deaths outside China fueled new fears that the outbreak will harm global growth. Investors flocked to safe-haven assets, driving gold near $1,700 per ounce and pushing the yield of the 10-year Treasury bond to its lowest-ever level. Some analysts viewed Monday's drop as a prime buying opportunity before the record-long bull run resumes. US stock prices sat at record highs as recently as last week, already surging higher after investors shrugged off initial reports of the virus' severity. The "over-complacent" reaction seen earlier in February should motivate investors to take defensive positions before another plunge, Shah said. "Given these over-valuations and market susceptibility to negative news flow surrounding the outbreak, investors should look to protect their portfolios and resist the urge to buy the dip," the strategist wrote. Shah recommends investors watch for new profit warnings in Europe to signal markets' next step lower. The continent's risk asset valuations "may have peaked," according to the strategist. Europe's economy relies heavily on export activity, and its entire stock market is at risk if coronavirus harms manufacturing activity, Shah said. Principal Global Investors manages $476.4 billion worth of assets. The S&P 500 was down about 2.7% as of 3:15 p.m. ET Monday. Now read more markets coverage from Markets Insider and Business Insider: Drug developer Gilead soars to 16-month high after WHO official says its experimental treatment is best shot for fighting coronavirus Fidelity and Charles Schwab say some users ran into technical issues in early trading as stocks tanked the most since August Intuit is reportedly about to buy Credit Karma for $7 billion, and a Wall Street analyst says it could give Intuit's AI a much-needed boostJoin the conversation about this story » NOW WATCH: A big-money investor in juggernauts like Facebook and Netflix breaks down the '3rd wave' firms that are leading the next round of tech disruption
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'We are not out of the woods': Bond King Jeff Gundlach reopens his bets against the stock market as the coronavirus rages
Jeff Gundlach, CEO of DoubleLine, reopened a short position against the S&P 500, expecting the coronavirus'...Jeff Gundlach, CEO of DoubleLine, reopened a short position against the S&P 500, expecting the coronavirus' economic outlook to further tank the index. The investor took to CNBC on Monday to reveal his new stake, adding that the Federal Reserve's spate of policy measures aren't enough to prevent a second downturn. The so-called "bond king" exited the last of his stock shorts on March 18, tweeting "the profits were just too great to not harvest." Visit the Business Insider homepage for more stories. Roughly one month after closing the last of his stock market shorts, Jeff Gundlach is once again betting the market will plummet. The CEO of DoubleLine and so-called "bond king" took to CNBC on Monday, saying the Federal Reserve's range of relief measures aren't enough to prevent a second market plunge. Recent economic data detailing the spike in unemployment is flying over investors' heads, Gundlach said, and prices will react negatively when the news catches up with them. "I'm certainly in the camp that we are not out of the woods. I think a retest of the low is very plausible," Gundlach said. "I think we'd take out the low." Read more: Goldman Sachs outlines a 3-part investing strategy to profit from the economy's reopening — including 4 stocks to buy for the recovery Gundlach revealed he placed a short position on the S&P 500 at 2,863, saying he doesn't expect the index to reach 3,000 before falling further. The stake isn't the same size as his February bet against equities, he added. The CEO closed his previous stock shorts on March 18, tweeting "the profits were just too great to not harvest, and the panic is palpable." The S&P 500 has soared roughly 30% from its March 23 low and has stabilized just below the 3,000 threshold. US equities posted their fourth straight day of gains on Monday, jumping as investors cheered plans to reopen state economies. The index sat at 2,882.47 as of 3:15 p.m. ET, up roughly 11% year-to-date. Now read more markets coverage from Markets Insider and Business Insider: GOLDMAN SACHS: Global oil storage could be maxed out in just 3 weeks, driving 'substantial volatility' Oil slumps 30%, ending 3-day winning streak as global oversupply outweighs production cuts A renowned market bear says stocks are setting classic trap before another steep plunge — and says the market is at risk of a 57% drop from current levelsJoin the conversation about this story » NOW WATCH: Here's what it's like to travel during the coronavirus outbreak
The stock market climbed for a second straight week, ignoring gloomy economic forecasts and bleak data...The stock market climbed for a second straight week, ignoring gloomy economic forecasts and bleak data as traders find a silver lining in the Federal Reserve. In recent weeks, the Fed has used both old and new programs to ensure credit flows where it's needed, signaling to investors that the public health crisis won't necessarily translate into a financial-market collapse. While the central bank's spate of relief efforts haven't directly lifted stocks, the policies "definitely had ripple effects into the equity market, no question about that," said Liz Ann Sonders, chief investment strategist at Charles Schwab. The Fed's policies "precluded the prospect of a complete economic collapse," leading traders to revive their risk-on views, Goldman Sachs analysts said in a recent note. Visit the Business Insider homepage for more stories. The stock market seems unshaken as signs of a deep coronavirus recession pile higher and higher. As quickly as the S&P 500 spun out of its 11-year bull run, it's soared out of bear-market territory and surged 29% in just over three weeks. This recent divergence between stocks and the economy has been jarring. How is the market so nonplussed by the mounting recessionary wreckage? Look no further than the Federal Reserve. Over the last several weeks, the central bank has shown it will go to unprecedented lengths to stimulate the economy and prevent further market disruption. Those signals have, in turn, stabilized stocks and allowed them to retrace a significant chunk of their post-coronavirus loss. Put simply, the Fed has been indirectly backstopping the stock market by reducing investor worries around how much the coronavirus lockdown will hurt corporate profits and strain outstanding debt. More than ever before Monetary relief efforts kicked off in mid-March when the Fed announced plans to inject up to $5 trillion into stressed money markets. Days later, the Fed slashed its interest rate close to zero for the first time since the financial crisis. In the following weeks, the authority created lending programs for small employers, households, and large businesses to aid cash flow. Purchases of Treasury bonds and mortgage-backed securities added additional liquidity to the crashing markets. Read more: 'I've gone to cash': Mark Cuban outlines his coronavirus investing strategy ahead of another 'leg down' in markets — and says now is the time to buy real estate The Fed announced a $2.3 trillion package on April 9 to bolster lending and begin buying corporate debt across a range of credit ratings. The policy salvo surpassed the Fed's entire financial-crisis playbook in a matter of weeks. Stock prices continued ticking higher over the period, with traders cheering relief programs as an indirect safety net for the battered equities market. The central bank was responding to a historic glut of negative economic data, all of which points firmly to an imminent recession. Many experts have said the US is already mired in one. Unemployment claims made over the past four weeks have nearly erased all jobs created since the financial crisis. Retail sales plunged by a record 8.7% in March as the virus kept shoppers at home. Consumer comfort suggested weak revenues were still to come as Bloomberg's index slid to its lowest level since before President Donald Trump was elected. The International Monetary Fund projected on Wednesday the world economy would shrink by 3% in 2020, making the "Great Lockdown" the most severe recession in nearly one century. The economic downturn could even last through 2021 in the event of a COVID-19 resurgence, the organization said. Still, when cracks began to appear in the Treasury market, the Fed stepped in by buying notes. When small businesses showed increased risk of bankruptcy, the central bank formed new credit facilities. In the wake of credit-market chaos, the Fed said it would begin buying bonds. Read more: Bank of America breaks down how to build the perfect post-coronavirus portfolio — one designed to recover losses and get ahead of an eventual economic recovery The corners of the economy may not be directly linked to the equities market, but the message is clear: pain is being addressed. "The carnage being alleviated there, by virtue of what the Fed did, definitely had ripple effects into the equity market, no question about that," Liz Ann Sonders, chief investment strategist at Charles Schwab, said in an interview. The turning point for Goldman The Fed's latest stimulus effort — the aforementioned $2.3 trillion economic aid package geared towards small businesses and local governments — was a major turning point in Goldman Sachs' stock market outlook. In the days after the announcement, Goldman published a report saying the central bank's stimulus efforts have set a sturdy floor under risk assets, and declared that the stock market had already bottomed. The analysts in turn boosted their year-end S&P 500 forecast to 3,000 by year-end. "The Fed and Congress have precluded the prospect of a complete economic collapse," the team wrote. "The numerous and increasingly powerful policy actions have spurred equity investors to adopt a risk-on view." They continued: "The Fed and Congress have precluded the prospect of a complete economic collapse. Investors have been encouraged by the 'do whatever it takes' approach of the Fed." Read more: GOLDMAN SACHS: Stocks are expected to see unprecedented moves this earnings season. Here are 18 under-the-radar trades that could pay off big. While the central bank never directly aimed to boost the stock market, its actions have sent a clear signal to investors worried of rising default rates and closed-off credit lines, Seema Shah, chief strategist at Principal Global Investors, said in an interview. By consistently providing monetary aid, investors see the bank living up to its promise to act "forcefully" in keeping the economy afloat. "They have, in some ways, set up a backstop," Shah said. "For example, if you feel like there are significant strains building up in one important segment of the market, at this stage it's fair for a lot of market participants to expect the Fed to intervene in that part." After trillions in aid, what comes next? One drastic additional step for the Fed would be to directly prop up the stock market by buying stocks. But Rich Steinberg, chief market strategist at The Colony Group, thinks this is unlikely. He believes such a measure would throw too large a wrench into regular operations. "Investors are conditioned for markets to buy dips, and I think it would be problematic if the Fed directly supported the equity market," Steinberg said in an interview. "I think they're going to try to stick to their mandate as much as possible." So can other additional stimulus efforts from the Fed continue to boost stocks? Shah says that ultimately depends on whether the coronavirus threat subsides to a point where economic activity can resume as normal. In other words, no matter what the Fed does, the virus will dictate the terms of further equity gains. The Fed's policies "are able to help the market functioning," Shah said, noting that a return to normal corporate profitability relies primarily on how quickly the economy can recovery. Read more: Morgan Stanley handpicks the 18 best US stocks to buy now while they're cheap to enjoy profits for years to come Profits — historically the biggest booster of share prices — depend on revenue recovering to pre-outbreak levels. Consumer activity will react on its own once lockdowns are lifted, "with or without the Fed help," Shah added. But don't count the Fed out completely. There's still time for the market to enjoy more Fed-induced optimism. The Fed has roughly $250 billion of available capital it can lever up as much as 10 times to either enhance existing stimulus programs or launch new ones, according to Bloomberg. Recent history also shows the central bank isn't afraid to write its own rules when the situation requires it, Sonders said. "Based on what they've already announced, they haven't exhausted all of the bullets," Sonders said. "Let alone the fact that, as we've learned, they can launch a whole new set of facilities if they need to." Now read more markets coverage from Markets Insider and Business Insider: The Fed isn't worried about enabling risk-takers as its massive stimulus attempts to revive markets and the economy, Cleveland chief says Goldman Sachs says now is the time to sell Apple, forecasts 20% drop from current level Goldman Sachs unpacks a ticking time bomb in the market's junkiest debt due to the coronavirus — and explains why even the Fed will be unable to avoid itJoin the conversation about this story » NOW WATCH: How waste is dealt with on the world's largest cruise ship
14 Wall Street experts told us the single metric they're each watching to assess coronavirus market fallout — and give their portfolios a leg up
Business Insider asked 14 investment strategists and analysts to share one crucial metric, index, or signal...Business Insider asked 14 investment strategists and analysts to share one crucial metric, index, or signal they're closely tracking as the novel coronavirus throws markets and economies into disarray. Their answers illustrate where experts are looking to gauge when the worst may be over for investors. "What matters for the market right now is the cresting of virus cases — not PMI data, not earnings revisions, and certainly not GDP estimates," one chief investment strategist said. Visit BI Prime for more investing stories. The novel coronavirus, with the devastation it's inflicted on economies around the world, has created a chaotic environment for investors that's virtually unparalleled. In the US, the longest bull market in history ended, but then the Dow Jones Industrial Average reentered one within weeks. Amid those price swings, a widely used measure of expected market volatility jumped to its highest level on record. The Federal Reserve attempted to stabilize the market with two emergency interest-rate cuts in March. That lowered borrowing costs and was designed to stimulate economic activity at a time when officials mandated quarantines, businesses shuttered, and experts forecast a skyrocketing unemployment rate. Now, as markets whip around into early April, and the investment community expects further deterioration of economic growth, investors are on edge in a highly uncertain environment. After all, there is no real COVID-19 playbook to consult. For a window into how strategists are judging the unprecedented macroeconomic environment, Business Insider asked 14 investment strategists and analysts to share one crucial metric, index, or signal they're closely tracking as they assess the ultimate damage the coronavirus will inflict. For the sake of drawing from a wide variety of economic and market gauges, we asked experts to provide a response other than the widely cited US jobless claims, which hit 6.6 million last week for a two-week total of almost 10 million. Their answers illustrate how they're gauging when the worst may be over for investors. Several told us the number of new coronavirus cases is the most important figure to watch — even more so than any core measure of the US economy. "The current environment has us paying less attention to economic data and laser-focused on the virus data," Ed Campbell, a portfolio manager and managing director at QMA, told Business Insider. Their responses come just ahead of corporate earnings season, which will give investors early evidence of how the virus has negatively affected a wide variety of public companies. First-quarter earnings for S&P 500 companies are expected to decline 7.3%, the largest year-over-year drop since falling 15.7% in the third quarter of 2009, according to FactSet. Here are the singular measures 14 experts told us they're watching:Lisa Emsbo-Mattingly, Fidelity: the Commodity Research Bureau's raw-industrials spot-price index Lisa Emsbo-Mattingly, the director of research for global asset allocation at Fidelity Investments, is keeping a close watch on commodities of all kinds. She's carefully monitoring the Commodity Research Bureau's raw-industrials price index, which tracks the direction of widely used commodities such as copper scrap, lead scrap, steel scrap, cotton, burlap, and rubber, according to Yardeni Research. The index, which was constructed in the 1950s, takes a look at the price of commodities harnessed in overall industrial activities. On Friday, the measure was near a four-year low. Emsbo-Mattingly considers the measure reliable because it's a real-time indicator of global economic activity and the strength of the US dollar. "When we see the CRB raw industrials begin to move consistently up, we will feel more confident on the outlook for US and global growth," she told Business Insider. David Aurelio, Refinitiv: semiconductor equipment Digital dependency has exploded in recent years, but the pace has picked up through the pandemic. Consumers are relying heavily on technology for connection as they spread away from peers and their workplaces. "At the heart of this expansion are semiconductors," David Aurelio, the senior equity-markets-research manager at Refinitiv, said, referring to the components and circuits found in many of our devices and computers. "If semiconductor-equipment companies are expected to grow, then expect to see economic expansion to follow," he said. The S&P 500 semiconductor-equipment subindustry is expected to report a rise in earnings this year of 16.8%, and nearly 24% next year, outpacing the broader market's earnings expectations, Aurelio said. With analysts' expected growth of 5G capabilities, too, the overall health of the semiconductor sector indicates "there is reason to be optimistic about economic expansion," Aurelio told Business Insider. The VanEck Vectors Semiconductor ETF has fallen about 22% this year, about in-line with the S&P 500's decline. He's also keeping a close watch on analysts' earnings revisions for companies' first-quarter earnings results. Solita Marcelli, UBS Wealth Management: areas of the market that may be oversold The old saying "throwing the baby out with the bathwater" refers to getting rid of something valuable in an unavoidable — yet mistaken — fashion while trying to reject something more broadly unfavorable. There's been a lot of that during the severe market sell-off, said Solita Marcelli, the deputy chief investment officer for the Americas at UBS Global Wealth Management. She pegged that dynamic — companies of all fundamentals being bought and sold indiscriminately, regardless of underlying strength — as one major theme she is closely monitoring to gauge the sell-off's condition. "Many stocks that have strong balance sheets and long-term cash-generation power have been hit just as much as those that are much weaker," she wrote in a recent note to clients. "This has created an enormous opportunity to own high-quality names that will differentiate themselves once dust settles." Just consider the median return for names with varying S&P quality rankings from the market's high on February 19 through March 20. They show a brutal sell-off that hasn't spared many. For instance, stocks with A+, A, and A- rankings have returned about -32 to -36% during that time — a showing not much better than names with the far weaker B- and C rankings, which have returned -44 and -31% during the same time, according to a UBS and FactSet analysis. Sam Stovall, CFRA Research: the S&P 500's rolling 15-day average intraday percentage price change One popular way to measure stock-price swings is the Cboe Volatility Index, known as the VIX — and even better known as the market's "fear gauge." The forward-looking index takes the S&P options' implied moves and conveys the level of expected volatility over the next 30 days, rather than "realized," or actual, volatility. As the markets have gone haywire, the VIX spiked just above 80 last month in its highest reading on record and fell in recent weeks to about 50 on Friday. Still, these figures are elevated; the index stayed below 20 for most of 2019. For a more granular look, the VIX is hardly the only way to look at how wildly stock prices are moving. Sam Stovall, the chief investment strategist at CFRA Research, told us he was looking to another measure of equity-market swings to gauge "when the worst may be behind us." He watches the rolling 15-day average intraday percentage price change on the S&P 500. We checked in with Stovall on March 30, when US stocks rose on the back of the Trump administration's expanded social-distancing measures. During that Monday session, his measure was "still on the ascent," so he didn't think the worst was over "just yet." The index's average intraday change on a percentage basis stood at 6%, the largest such mark since the 2007-09 financial crisis. On April 3, we checked in for an update. "My volatility measure has been on the descent" since March 27, "implying that the worst may be behind us," Stovall said. Frank Cappelleri, Instinet: the NYSE Tick index As a technical analyst, Frank Cappelleri spends a lot of time examining the minutiae of markets. Cappelleri, Instinet's chief market technician, regularly sends clients market snapshots throughout the trading session, detailing key levels to watch on the S&P 500 and providing historical context around the market's moves. He told Business Insider that lately he's paying attention to one investors might be missing out on: the NYSE Tick index, which measures the difference between stocks listed on the New York Stock Exchange moving higher and those moving lower at any point in time. During periods of relative market calm, the index is generally between minus 1,000 and plus 1,000, he said. For instance, the average tick range between October and February 19 — the S&P 500's closing high — was 1,700. Since then, the average has been 2,700, marking a rise of nearly 60%, he said. As long as that range remains wide, investors can expect conditions to remain stressed. By design, the index can highlight a situation that the widely used VIX may not fully be able to show. While investors know volatility as measured by the VIX has "exploded," Cappelleri said, it spikes only during severe market sell-offs, while the NYSE Tick index "reveals acute intraday activity in both directions by displaying outsized movement in both buying and selling surges." Emily Roland, John Hancock Investment Management: the US dollar's direction Through the market's recent chaos, Emily Roland — the co-chief investment strategist of John Hancock Investment Management — told us she was closely watching the US dollar's direction. "It will provide important clues to cross-asset class performance," Roland said. The US dollar index measures the greenback's value against a basket of other currencies, most heavily against the euro. In March, it shot up to the highest point in more than three years as "investors frantically raised cash," Roland said. It has risen by about 4% this year. The strategist believes the US will emerge from the coronavirus crisis in a more resilient fashion than other economies and expects the dollar to maintain strength as volatility subsides across currency markets. Amanda Agati, PNC Financial: sub-investment-grade bonds Last month, alongside two emergency interest-rate cuts, the Federal Reserve announced a laundry list of new measures to aid the economy through the economic damage the coronavirus crisis is causing. Among other programs, the US central bank created credit facilities to support credit going to large employers. One was formed to purchase corporate bonds issued by investment-grade US companies, as well as US-listed exchange-traded funds whose purpose is to provide "broad exposure to the market for US investment grade corporate bonds." But "none of the Fed's tools directly support the below-investment-grade fixed-income market," Amanda Agati, the chief investment strategist at PNC Financial, told Business Insider. That's why she's keeping a close watch on how bonds with sub-investment-grade ratings, an area which includes the high-yield segment, are faring without that extra injection of support. For instance, more than 10% of the Bloomberg Barclays High Yield index is made up of names in the energy sector, Agati said. The $2 trillion fiscal stimulus package that passed in the US last week did not include language around relief for shale-oil producers — a particularly challenged industry with plunging oil prices and slowing global economic growth, she said. Agati is also closely watching the Cboe Volatility Index and new cases of COVID-19. Her team believes that number must slow in countries like Italy and the US before the market finds a bottom. "In other words, what matters for the market right now is the cresting of virus cases — not PMI data, not earnings revisions, and certainly not GDP estimates," she said. Liz Ann Sonders, Charles Schwab: the case curve of COVID-19 The most important metric for investors to pay attention to is COVID-19's case curve, Liz Ann Sonders, the chief investment strategist at Charles Schwab, said. That's "for every reason, including the health of Americans, the health of our economy, and the health of the stock market," she told Business Insider. "Until we start seeing a bending of the curve, it's hard to envision a light at the end of the tunnel for either the economy or stocks," she said. The US has the largest reported virus outbreak, representing more than one-fifth of cases worldwide, Business Insider has reported. Deepak Puri, Deutsche Bank Wealth Management: broad US financial-market conditions A selection of readings reflecting broad US financial-market conditions — funding-market stress, financial-market liquidity, and US corporate-credit spreads — are top of mind for Deepak Puri, the chief investment officer for the Americas at Deutsche Bank Wealth Management. As spreads across the investment-grade- and high-yield-credit markets have widened to levels not seen since the global financial crisis of 2007-09, "fixed-income investors have shown a very little appetite for credit risk," Puri told Business Insider. "So far, we are encouraged that the 'do whatever it takes' approach by monetary policymakers has helped restore confidence in the credit markets, along with the added liquidity," he added. Tony Roth, Wilmington Trust: declines in gross domestic product Tony Roth, the chief investment officer of Wilmington Trust, the investment-advisory arm of M&T Bank, is closely watching for declines in US gross domestic product. Roth estimated that the precautions states are taking across the US to mitigate COVID-19's spread could lead to a 34.4% annualized rate of decline for the second quarter if the current conditions persisted for three months from early April. "That would be by far the worst rate witnessed in US history of GDP data, going back to 1949," he told Business Insider, adding a slow resumption in economic activity during the second half of 2020 would lead to a decline of 2.6% for the year. If the entire US were to operate under stay-at-home orders for the next three months, that could lead to a more severe scenario with businesses remaining closed and consumers continuing to curb spending, Roth said. That would lead to a 61% annualized rate of decline for the second quarter and a drop of 8.5% for the year, according to his projections. Roth sees markets higher nine months to a year from now. "Currently, our recommendation to clients is to rebalance, avoid selling if you don't need immediate liquidity, and if you have new cash, average this into the market on a slightly accelerated time frame," he said. Katie Stockton, Fairlead Strategies: a key technical range on the S&P 500 Katie Stockton, the founder and managing partner of Fairlead Strategies, an independent-research provider with a focus on technical analysis, is laser-focused on key levels for the benchmark S&P 500. "As a technical analyst, support and resistance levels are incredibly important as a gauge of risk/reward," she told Business Insider. Stockton sees the index's risk framed by long-term support of about 2,300 to 2,350. She arrived there after considering a 38.2% Fibonacci retracement level (a term in technical analysis referring to areas of support or resistance), the S&P 500's low in December 2018, and another technical metric called the monthly cloud model. "This level is key toward the preservation of the uptrend that began in 2009, in my opinion," she said. The dip below that area in March was not a technical breakdown, she said. For that kind of damage, she requires consecutive weekly closes below support, "especially in emotionally charged environments, which are prone to shakeouts," or "false breakdowns," Stockton said. Ed Campbell, QMA: COVID-19 data "The current environment has us paying less attention to economic data and laser-focused on the virus data," said Ed Campbell, a portfolio manager and managing director at QMA, the quantitative-equities and asset-allocation business at PGIM, Prudential's investment-management arm. With the lockdown measures in place during the coronavirus outbreak, economic data will "cease to have value for markets," so he's watching for the trajectory of new infections to indicate when quarantines will end and economic activity will pick back up. He believes the path of cases in the US is closely tracking cases in Italy — which has the highest reported death count — with a two-week lag. "Should Italy's decline in new cases continue and point in the direction of containment, it may lead to the expectation that an apex and containment for other Western countries are not far behind," Campbell said. "This could be an important inflection point for markets." John Stoltzfus, Oppenheimer: how the spread of COVID-19 is being contained John Stoltzfus, Oppenheimer's chief investment strategist, told Business Insider that the most important indicator for a sustainable stock market rally is the progress made in stemming COVID-19's spread. "At the end of the day, it's a health-risk story with economies on lockdown," he said. The coronavirus has spread to nearly all of the world's countries and territories, according to data from Johns Hopkins University. Ryan Detrick, LPL Financial: a peak in US coronavirus cases Ryan Detrick, the senior market strategist at LPL Financial, said the biggest factor he's been watching is a peak in the number of coronavirus cases in the US. "While US cases continue to climb, the more countries that reach their peak, the more clarity we gain into what that timing may look like for the United States," Detrick said. The US has recorded the highest number of cases, with just over 337,000 confirmed, according to Johns Hopkins University's database. More than 1.2 million people around the world have been sickened by the coronavirus. "Investors have historically been rewarded for investing during these crisis events, and we believe the time for suitable investors to consider adding some risk to their portfolios may be approaching," he said.