Tags: Koesterich | sentiment | correction | fundamentals

BlackRock's Koesterich: Market Sentiment Has Changed More Than Fundamentals Have

By    |   Wednesday, 05 February 2014 09:05 AM

The Standard & Poor's 500 Index has dropped 5 percent so far this year, leading to dire market prognostications from some forecasters.

But Russ Koesterich, BlackRock's global chief investment strategist, points out that not much has changed in terms of fundamentals.

"The global economy is not in a significantly different position to where it was a month ago when stocks were much higher," he tells CNBC.

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"What has changed is sentiment, especially toward emerging markets. From that perspective, there's probably some more downside. If we pull back another 4 to 5 percent, that's a good buying opportunity," Koesterich explains.

"There's some recalibration of expectations by investors who came into the year with some very optimistic views about the U.S. economy."

John Rutledge, chief investment strategist at investment firm Safanad, notes that markets have tanked on only isolated economic news. "The interesting thing is how much movement there has been on so little information," he tells CNBC.

"We've had a weak U.S. ISM [manufacturing activity] number and China PMI [purchasing managers' index], which registered just a small fall, so that would suggest this [selloff] is a correction."

That may be part of why Bob Doll, chief equity strategist at Nuveen Asset Management, tells CNBC this is indeed just a normal correction in a bull market.

Others feel the same way. "A 3.5 percent drop in one month [the S&P 500 fell 3.6 percent in January] is not something to worry about. Since 2009, we had one monthly loss for every three gains," Frank Fantozzi, president of Planned Financial Services, tells MarketWatch.

"We advise our clients to allocate more money to emerging markets, which look cheap at the moment, and to U.S. stocks, as we believe the big macro picture remains intact."

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The Standard & Poor's 500 Index has dropped 5 percent so far this year, leading to dire market prognostications from some forecasters.
Koesterich,sentiment,correction,fundamentals
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2014-05-05
Wednesday, 05 February 2014 09:05 AM
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