(This is CNBC Pro’s live coverage of Wednesday’s market chatter on the market volatility.) Whether it’s time to buy the dip or prepare for more pain ahead is on investors’ minds Wednesday as they deal with the most volatile period for stocks of 2024. The market was rebounding for a second day but investors remain on edge after Monday’s brutal sell-off. The Dow Jones Industrial Average lost more than 1,000 points to start the week, with the S & P 500 posting its worst day since 2022. On Tuesday, the following day, the major averages rebounded sharply . Many investors advise against buying the dip just yet, as they expect this volatile period to continue through October at least. Others are concerned the pullback is a portent of a recession ahead. Follow along for the latest market chatter and reaction. All times ET. 8:59 a.m. Piper Sandler chart analysts say bet on an eventual S & P 500 rebound to new high of 5,800 The chart analysts at Piper Sandler are not worried about the recent pullback and said investors should “roll with the changes” that have occurred in the market in the last month, like the rotation to smaller stocks. Craig Johnson and Scott Smith said in a note Wednesday that investors should expect volatility spikes like this and historically they end around October. The two cite a steepening yield curve, the testing of key market support levels and relative strength of smaller stocks as reasons to remain bullish. They maintain their S & P 500 year-end target of 5,800, which represents a nearly 11% rebound from Tuesday’s close and a new record for the benchmark Piper found some interesting data to support their bullish thesis. During this recent market pullback, the Cboe Volatility index more than doubled to above 30 and the S & P 500 still managed to stay above its 200-day moving average. Since 1991, when the VIX spikes above the 30 level and the S & P 500 stays above its 200-day moving average, it tends to rebound after three months following some sideways trading. Basically it means the recent panic didn’t damage the market’s long-term trend. The firm says investors should embrace the rotation to financials and industrials, along with smaller stocks. “The Fed will likely cut interest rates at least once later this year, which has historically benefited Small and Mid-cap companies,” stated the note. — John Melloy 8:26 a.m. ‘Worst might not be over,’ UBS says There’s more pain to come, according to UBS. Strategist Shahab Jalinoos said elevated signals in a number of indicators suggest the market selloff is not yet over, citing, for example, high levels in Wall Street’s “fear gauge.” The CBOE Volatility Index (VIX) was last around the 23 handle. “We suspect the level of anxiety that there is more damage possible in what may be perceived as a thinner liquidity summer environment is likely to keep many twitchy,” Jalinoos wrote in a Tuesday note. 8:20 a.m. It’s not yet safe to get back into stocks, Citi says Stocks have recouped some of their losses during Tuesday’s session, but that doesn’t mean it’s safe to go back in, according to Citi. “Positioning in SPX and Nikkei was not overly stretched to begin with, but at this stage only around one-half of the recent run-up has been pared back as of Friday. For NDX and Kospi, positioning has been reduced by less,” strategist Dirk Willer wrote on Tuesday. “The positioning clean-up is not far enough advanced yet to make it safe to re-enter the equity market, in our view,” he said. 7:59 a.m. ‘Bad news’ is back to being bad news, Wolfe Research says Bad economic news is back to being bad news for stocks, according to Wolfe Research. For much of this year, stocks reacted positively to signs of economic cooling for the bulk of this year, as investors took the reports as signs the Federal Reserve could soon cut interest rates. After last week’s disappointing July jobs report, however, investors are concerned the economy is now cooling too quickly, and could be headed toward a recession. “Our sense is, a weaker-than-expected ISM Manufacturing and payrolls report last week has shifted the narrative back to ‘bad news’ being ‘bad news’ as investors start to question whether a few Fed rate cuts will avert a broader slowdown,” Chris Senyek, chief investment strategist at Wolfe Research, said in a Wednesday note.
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