The major U. S. indexes are falling on slashed forecasts for growth in Europe. Five experts share their thoughts on what the moves could mean.
U. S. stocks took a hit Thursday on concerns around global growth after the European Central Bank cut its forecast for 2019 and announced plans to stimulate the European economy, but Wall Street experts say it’s not all bad.
Even as weaker growth and inflation in Europe typically don’t help the U. S. economy, some see the decision by ECB President Mario Draghi as a welcome reprieve for a U. S. stock market that has seen especially volatile trading in recent months.
Here are five experts’ takes on Thursday’s moves:
• Art Hogan, chief market strategist at National Securities, saw the action as the beginning of U. S. stocks digesting their recent rally: «Our clients very much are attuned to the fact that we went down too far, too fast in the fourth quarter of last year, particularly in December. So, therefore, that V-shaped recovery has probably been too quick. And I think we’re at a point where investors understand that when you move that quickly in one direction, you have to take some time to digest that move. I think we’re at that period now, so I’m not surprised at all [that we’re] finding ourselves spending some time between 2,750 and 2,800, unless and until we actually see the manifestation of good news coming out of the things we’ve started to price in, things like the trade war being over. We need to see that turn into good news and economic data.»
• UBS’ Art Cashin said Thursday’s drop was a sign «that things are slowing down.
