CEO and Chief Investment Officer
Channing Capital Management
Last year we had a couple of rally periods and then the market went into sort of doom and gloom. But now we have more of the federal programs enunciated and we are seeing some signs of bottoming out in terms of microeconomic reports. The panic has passed. A lot of stocks were beaten up irrationally beyond any kind of valuation. Logic has rebounded.
We won’t see the market go back to its lowest levels. But I do believe that it is possible as we go through these earnings seasons, we could see some retrenchment in the market. The timetable for the economic recovery that is needed is still uncertain. But these five weeks of recovery in the market is a good sign that the worst is over.
Because of the unusual nature of the downturn we have witnessed, consumer and investors confidence is a huge factor. Microeconomic data is still coming out negative about jobs and the like. It is unclear when that is going to turn. People are looking for signs of stability. One way to think about it is to wait for the unemployment data to show a flattening and housing activity to show a flattening. Before things get better and start to grow we will see that the numbers aren’t getting worst. The market will be well within its recovery phase before we see jobs coming back really strong.
Where McKissack sees opportunities for investors: financial and consumer discretionary companies