1:23 p.m. ET, April 8, 2020
Stocks are up but we've seen bear market rallies before: JPMorgan Asset Management strategist
From CNN Business' Anneken Tappe
Stocks are up and on track for a third straight day of gains.
The S&P 500 is now up more than 20% from its low point on March 23. But is this the end of its bear market?
Not so fast. "Bear market rallies are something you see before the market recovers," Samantha Azzarello, global market strategist at JP Morgan Asset Management, told Alison Kosik on the CNN Business' Digital live show
Markets Now.
At the height of the 2008 financial crisis, there were 11 rallies before the market bottomed out and fully started to recover in March 2009, she said.
"We need to internalize how negative the data will be in Q2," Azzarello said. The market could drop again when the data surprises on the downside, she added.
The first data points since the coronavirus outbreak swept across America didn't look good: nearly 10 million people filed for initial unemployment benefits over the past two weeks.
But the magnitude of job losses was likely already priced in.
"What I don't think has been priced in is that negative Q2 GDP number," Azzarello said. How bad that number will be depends on how long the economy is shut down.
Negative earnings surprises aren't really priced in yet either, she said, because there is so little clarity for companies and investors. Businesses pulled their profit guidance over the past months, as they cannot predict how bad the fallout will be for them.
Still, Azzarello isn't advising clients to leave the stock market behind.
"We're advising clients to get back to plan," Azzarello said. "But have we hit the bottom? Is it time to load up on stocks ? Certainly not." If the market gyrations have changed investors' portfolios, she dded, they should get back to the allocations they intended.