Stocks plummeted Monday after being halted from trading soon after markets opened as investors weighed the deepening economic hit from the coronavirus pandemic and the Federal Reserve and other global central banks took emergency measures to prop up capital markets and liquidity.
So, with that all said and done, what should investors do now?
Chris Versace, Real Money contributor, joined TheStreet to weigh in on stocks to eye and his thoughts on whether or not we're going to see a bottom in the market.
Despite a shocking rate cut from the Federal Reserve Sunday, which lowered rates to 0% to 0.25%, the lowest rates slashed since the 2008 financial crisis, but the market just is not reassured by this move. Joining me to explain how to handle a market like this is Chris Versace, RealMoney contributor. Chris, you manage the stocks under 10 portfolio for our sister site RealMoney. Would you suggest that now is the time for investors to look at some cheaper stocks to buy up?
Well, I think if the question is do you want to look and build your shopping list? I think the answer is absolutely yes. The question I think you're getting at is, is now the time to pull the trigger? Look, I understand that people are going to be tempted by what's gone on in the carnage in the marketplace, but I think we have to consider some of the news that we got earlier today and really over the weekend. When you see companies like Apple, Peloton, Under Armour, Nike closing their stores for the next couple of weeks. When you look at Starbucks saying to its patrons, "Hey, thanks for coming, but you can't stay here. You can feel free to take it out or mobile order." When you see those types of things, you see the slashes that airlines are putting out there, whether it's American Airlines, United Airlines, to their capacity and their expectations. We're only in the early innings of the coronavirus hitting here in the states, so I do think there's going to be several ripple effects to be had.
Meaning that what we've seen thus far is only the beginning and I think over the next, call it week, 10 days as the number of case counts escalate, we'll have a much better idea of what the real duration is going to be and then therefore what the impact on the global economy and on earnings could be. Once we have that, then I think, I won't say we're at the point, I think we're closer to the point where people want to put money to work.
All right, Chris. You gave me the ammo so I'm going to use it. When do you think we're going to see a bottom in the market here?
Well I think we go back to my comments. Is the market forward looking animal? Yes it is. However, we are starting to see some numbers come in. Goldman Sachs cutting their GDP for the second quarter to I think negative 5% or something like that. But again that's only based on the information we have thus far. We're only now starting to see states really start to put in lock downs, the bars, restaurants and this other stuff starting to really reduce hours or close entirely, and it's going to get worse. Make no mistake. Again, I think people looking to bottom fish, you want to catch that falling knife so to speak, I think you're going to be much better off waiting probably until the end of this week, early next week at the soonest.
All right, Chris. Thank you so much for taking the time to talk to us today. Guys, of course, you have to head over to thestreet.com for all of the latest on the coronavirus and the markets.
Catch up on the Latest Videos on TheStreet!
- How the Coronavirus Could Impact Markets This Week
- Stocks Fell Friday, But There’s One Reason For Optimism
- Stocks to Consider if There Is a Coronavirus Pandemic
- A Legendary Investor Reveals How to Play the Markets Now
- The History Behind Warren Buffett's Berkshire Hathaway
- Women’s History Month: Wall Street Women In History: Meet the First Female Stockbroker
- TurboTax Webinar: How to Track Your Tax Refund
- TheStreet Explains: What Is the Fed Funds Rate?
- Retirement Daily: Don’t Retire With Debt: It’s Bad for Your Well-Being