NEW YORK (TheStreet) — It hasn’t gotten any easier for investors over the past week following the Federal Reserve’s decision to leave interest rates at zero. In that span, the S&P 500 ETF (SPY) has fallen over 5%, and is down over 1% on Thursday.
Fed Chairwoman Janet Yellen is scheduled to speak on Thursday at 5 p.m. EDT.
On CNBC’s "Fast Money Halftime" show, Pete Najarian, co-founder of optionmonster.com and trademonster.com, said many investors are still confused from the last time they heard Yellen speak, last Thursday.
As for the broader market, Najarian pointed out that the volatility index continues to move higher. The oil volatility index is also moving higher, which doesn’t bode well for equities.
Saret Sethi, managing partner at Douglas C. Lane & Associates, said cyclical and industrial stocks have been hit hard since the Fed’s decision to leave rates unchanged. Investors’ mind-set is to sell first and ask questions later.
Joseph Terranova, chief market strategist for Virtus Investment Partners, said international stock markets are unlikely to be strong for the foreseeable future. U.S. stocks will likely be the best performers, even those aren’t doing that well. The S&P 500 is likely to test 1,900, and some investors are looking for a test of 1,820. With that in mind, why would anyone want to buy stocks now?
Yana Barton, portfolio manager at Eaton Vance, said the increased volatility and uncertainty has made the market a much tougher environment for investors. More clarity will come once companies start to report earnings. She said she expects companies with strong fundamentals to outperform, and also expects industries such as information technology and health care to do well.
Specifically, she likes Palo Alto Networks (PANW – Get Report), which she said is in the "sweet spot" when it comes to cybersecurity. She also likes Gilead Sciences (GILD) and Celgene (CELG), which may have roadblocks on pricing because of Washington. Barton explained, however, that the stocks have a low valuation, "extraordinary" pipelines and excellent products on the market.
The conversation turned to Netflix (NFLX – Get Report), after Ken Sena, managing director and Internet analyst at Evercore ISI, reiterated his sell rating on the stock. He has a $69 price target on Netflix, and argued that the company’s content costs are bound to go up, while increased competition will hurt its subscriber growth. International growth in big markets such as China and India could also be suspect, as competition continues to heat up. Although Sena said Netflix can still be successful, its valuation seems too high.
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