Stocks may be in a bull market correction

The economy is still doing well and stock values are reasonable, Blackstone's Byron Wien says.

By MSN Money Partner Aug 6, 2014 3:31PM
Credit: © Image Source/Corbis
Caption: Bull and Bear MarketsBy Matthew J. Belvedere, CNBC

Making his case for why the bull market in stocks is not over yet, Byron Wien, the vice chairman of Blackstone Advisory Partners, told CNBC on Wednesday that the fundamentals are sound but that investors have become too complacent.


"The economy is doing well, . . . (and) the valuations are reasonable. So I think this is a correction in an ongoing bull market," Wien said in a "Squawk Box" interview.


U.S. stock futures were lower in early trading as concerns about Russia massing troops along the Ukrainian border continued to roil the markets after Tuesday's triple-digit drop in the Dow Jones Industrial Average ($INDU).


But even with the rough patch for the market, stocks are not even close to official correction territory -- defined by a 10 percent decline from record highs.


Wednesday, the Dow was only off 4.1 percent from its intraday high on July 17 of 17,151. The Standard & Poor's 500 Index ($INX) was off 3.52 percent from its intraday high of 1,991 on July 24, while the Nasdaq Composite Index ($COMPX) was down 2.8 percent from its intraday high of 4,485 on July 3.


"There was too much optimism," Wien argued. "When everybody is feeling complacent and comfortable, . . . the market is vulnerable. And there's enough geopolitical influence to precipitate that."


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41Comments
Aug 7, 2014 9:44AM
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47 to 50% on food stamps. Poverty rising in the suburbs. The country is not doing well. When the welfare rate goes down then it is the time to brag. Sucking the country dry of funds is not a correction.
Aug 7, 2014 10:35AM
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All you nabobs of negativity need to crawl out of your basements once in a while.  Everything in this world is not gloom and doom.  There is never a sure-fire time to invest, there will always be doubt, always be uncertainty and always be fear.  But if you never jump in, you will never have the opportunity to profit.  Risk cuts both ways.  Grow some nads.  Otherwise you will find yourselves wallowing in your self-pity again in about 4 months when the market is setting new highs and you got left in the dust -- again.  But it won't be your fault.  No, never.  It will be some phantom menace on Wall Street that deprived you and cheated you.  The skinger throws down some REAL TRUTH!  BAM! 
Aug 6, 2014 11:27PM
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Italy's economy slides back into recession

August 6, 2014 11:58 AM ET

By Steve Scherer and James Mackenzie

Aug 6, 2014 9:38PM
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Dah, the markets do not like uncertainty and that's the game until after November elections.
Aug 6, 2014 11:30PM
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"The economy is doing well, . . . (and) the valuations are reasonable. So I think this is a correction in an ongoing bull market," Wien said"

Like his type would say anything else. These parasites will say anything and everything to get folks into stocks regardless of the actual economy. They basically lack morals.
Aug 7, 2014 11:22AM
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If it wasn't for all the QE's, it wouldn't be at what it is now. Its way past time to pull the plug on QE's and let it run its course without the Feds propping it up.
Aug 7, 2014 11:29AM
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Do not worry the Fed is only $4trillion in debt and thy are still giving money to the banks at near zero interest. The tax payers will pay for this bull!
Aug 7, 2014 8:10AM
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Not buying it. I'm sticking to 30% stock for now. 15 years till retirement.
Aug 7, 2014 10:22AM
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Article nails it.  One step back to go two steps forward.  Market highs by end of year, correction cleans out the riff-raff.  This isn't my first rodeo.
Aug 7, 2014 9:56AM
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in other words  it smoke and mirrors  until the millionaires and billionaires can get there  money ready to  move.  when it crashes  the 401 k  will be left holding the  bag . remember last time 401 k could only  move  5000 a day ???  plus  most people  won't know about the  crash  until its to  late government and big money in complete control of  your  money
Aug 7, 2014 11:34AM
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"The economy is still doing well and stock values are reasonable"

 

No comment other than two words: Market.........shill

Aug 7, 2014 11:50AM
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Why wouldn't he say that? He's a Stock Broker and their message always stays the same Hold, Hold, Hold!!! Lol
Aug 6, 2014 3:54PM
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I think we still have a few legs down to go.  

One week ago, I shorted the S&P 500 and the Euro against the USD - that's worked out pretty well so far. 
Aug 7, 2014 12:03PM
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Stock tip of the day:  Go long on Alcoa.  I sense a run on tinfoil for the nuts on this thread.
Aug 7, 2014 11:03AM
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What is 10% of 17,100? About 1700...so the market should recede to about 15,700 then the world will be right again? ha...haha...hahaha.
Aug 7, 2014 1:43PM
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There's a part of me that wants to agree with some of you who think that big time investors prey on the little guy by inflating values just to pull the rug out from under, however, consider this:


1. The '08 recession taught us that the U.S. is still one of the best places to invest your money. Did big investors pull out of the market? Some did. What happened? It all flooded right back in once everyone cleaned their underwear! I admit the little guy who tried to save 50% of his retirement fund by pulling out made a big mistake but that's his/her mistake, not the fault of big investors. My mother and father were very worried being retirement age and understandably so but my advice to them was don't overreact, it'll be back, they've now seen almost a full recovery and took advantage of the market when it was down making them better off in the long run. Sometimes it's not always a bad thing. Laws of nature apply to everything and the stock market is no exception, sometimes a few trees need to burn down to save the forest and many times it makes everything stronger/healthier in the end.


2. There's nothing people with a lot of money like more than making more money, to do so means investing and re-investing. Besides it's not in their or your best interest to cut-and-run with their money. Let's say you made $20k on a $2k investment from 1930-1950, then ran with your money and stuffed it in a mattress, what would you have today? $20k. Using the average inflation rate of 3.64% from 1950-2014, $20k is worth almost $200k in 2014. The reality is, smart investment would have made you a whole lot more than that. I'm not a Buffet disciple but he is right when he says the best time to sell is never.


3. Real investors put their money into well-run businesses, and they won't abandon a good investment, in fact, they'll buy more when everyone else is freakin' out, your fault, not theirs. You are an absolute sucker if you invest in company because some guy told a guy you know to invest in a certain company. Don't throw darts in the dark at companies you know nothing about, do your own research and simply watch the overall trends in society. Did you need to know about Microsoft back in the 80's or did you need to know the digital age was coming? That's not seeing the future people, that's just understanding where society is headed and there are signs everywhere.


4. It's nobody's fault but yours if you decide to sit on the sidelines, just know that your money is only going to be worth what it's worth today, which means it'll be worth a whole lot less 20 years from now.

Aug 7, 2014 11:51AM
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Wall Street WISHES this was it for it's "correction". Unfortunately, the deflation from too much fake money and an artificial financially-driven economy for too few of us has only just begun. The real downturn happens when dysfunctional business platforms have to liquid stashed assets to cover sell-offs. The Fed isn't going to be lending after prolonged QE, near-zero bank rates and the buying of garbage assets that do not perform. I suspect that most its-only-about-money people will shoot themselves. Lemmings follow. Perhaps in hindsight we will make a new Amendment that labels a group that hustles financially is guilty of tyranny and tyrannical control and is subject to the Death Penalty. Free the money. Make it solvent based on work hours and fair pay. 
Aug 7, 2014 12:03PM
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THE ANSWER TO ALL OUR FINANCIAL PROBLEMS IS TO STOP THE GREGIOUS TAX EVASION BY CORPORATIONS, GETTING AWAY WITH AVOIDING TAXES TO THE GENERAL FUND.

REPUBLICANS NEED TO STOP THIS PRACTICE IMMEDIATELY.

Aug 7, 2014 11:45AM
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I thought the architect of this debt ridden economy; Alan Greenspan stated last week that the market was due for a correction. That's why the market has fallen. The corrupt one still has the power even while he is behind the scene.
Aug 7, 2014 10:47AM
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The fed and its (got away with murder) big banks have orchestrated this slight pullback to make the values they have chosen appear more real (as if somehow the crazy gambling big bank casinos are being super cautious with the free money they've been given especially knowing they'll all be bailed out if they lose it all, just like last time). They fully and completely control every aspect of these and all asset prices. They don't even lie about it anymore as the government usually does. They have said publicly many times that they control these prices. Yellen might as well hold a press conference every Monday and simply announce what the dow number will be at week's end. At least then we could rid ourselves of all these worthless articles and "analysts", and the constant shoving of that stupid rigged dow number in everyone's face..
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