Breakout

With stocks still stagnant S&P's Stovall says be careful before jumping into the market

Kevin Chupka
Breakout

The summer stock doldrums continue today, even in the wake of a surpise to the downside in the final Q1 GDP print. "I think it's such old news that investors are simply gonna look more carefully at new economic reports coming out to see if indeed the coming quarters performance is expected to be as strong as most economists predict - forecasting about a 3.5% increase in GDP for the second quarter," Sam Stovall of S&P Capital IQ says.

Related: Goldilocks scenario is the perfect bedtime story for a sleepy market

The lack of reaction adds to a stagnant market that hasn't seen such a lack of activity in almost 20 years. "If you look back over the past several months we've had basically zero days of one percent movements in the S&P 500," Stovall notes. "You have to go back to 1995 to find a similar string of very low activity."

So, generally speaking, how should stock watchers play this market?

Related: Bull markets don’t die of old age, why Dow 44,000 is coming

"I'm telling people to be careful," Stovall says. "Don't be listening to the sirens song and be enticed to jump back into the market aggressively. Our feeling is we are priced to perfection.. Plus we've gone 32 months without a decline of ten percent or more versus an average of 18 since World War II." Adding insult to injury Stovall notes "we are heading into the third quarter which historically is the worst of all four."

More from Breakout:
Supreme Court kills Aereo — and cord-cutters' dreams
What investors will look for at Google's I/O conference
There's truth in wine ... and also billions of dollars

 

View Comments (38)