After a brutal meltdown, some investors have been wading back into U.S. stocks. But others are wary of another leg down as the coronavirus spreads and its economic impact is difficult to predict.
FILE PHOTO: The Wall St. Bull is seen standing on a nearly empty Broadway in the financial district, as the coronavirus disease outbreak continues, in New York City, New York, U.S., March 23, 2020. REUTERS/Mike Segar
“People are trying to time the bottom and that’s indicative of an early bear market, when people have hope,” said Richard Bernstein, chief executive officer of Richard Bernstein Advisors. “The beginning of a bull market starts with complete despair, when you’ve killed hope.” Ackman, whose Pershing Square LP fund gained a net 6.8% this month according to one investor, wrote to investors last week to say he had taken off credit market hedges and invested the money in new and existing stock holdings after turning “increasingly positive” on stock and credit markets.
“Those advocating for less strict policy options have no real idea of the full social and economic costs of a large epidemic,” said Steven Riley, Professor of Infectious Disease Dynamics at Imperial College London, Faculty of Medicine, School of Public Health, in an email to Reuters. Money managers rebalancing their portfolios to boost equity exposure into the end of the quarter may be supporting stocks.
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