Ellen ChangThe market could see a huge correction in a few months, says Dan Cook, senior market analyst at IG Markets.

Investors are not buoyed by positive earnings reports, he says.

“There’s still a lot of confusion in the market. We’re looking at a pretty positive earnings season overall, but as we saw (recently) it was basically ignored due to political conflicts and we’re likely to see more of that,” Cook said.

Cook predicts there to be a 20 percent to 25 percent correction in the markets by April or May.

“It wouldn’t surprise me to see a range of 8,800 to 9,000 on the Dow. There are a few individual stocks I like, but sector-by-sector, I’m definitely more bearish than what I am bullish,” he told CNBC.

The market has also benefited from not being affected by inflation, the New York Times reported.

“The Fed’s job is easy today, because we’re not even back into positive territory on payroll and employment numbers. We’re a long ways away from significant inflationary pressures in the labor market,” said Peter Hooper, chief economist for Deutsche Bank Securities.

The economy remains weak and can not improve with higher interest rates, Bloomberg reported.

“The economy is just too fragile to start raising rates at this point,” said Terry Morris, a money manager at National Penn Investors Trust Co. in Wyomissing, Pa., which manages $2 billion.

The euro dipped to a six-month low compared to the dollar on news from the European Commission stating that Greece has failed to fix its budget deficit.

“It’s basically a fear of the unknown that people have,” said Michael O’Rourke, chief market strategist at BTIG LLC in Yardley, Pa., which provides trading services for large investors.

“The euro is a relatively new currency and it hasn’t been crisis-tested the way it’s being now.”

VN:F [1.9.22_1171]
Rating: 0.0/10 (0 votes cast)