Stocks enjoyed a late-day rally Thursday after the S&P 500 broke through its Oct. 10 low — but the euphoria abruptly ended amid talk of a $14 trillion consumer debt pile, and layoff talk from Sun Microsystems and Dow Chemical. CNBC's expert guests offered their views on what's coming next.
What 'Shape' is The Recession In?
Kate Schapiro of Sentinel Investments told Squawk Box that recession and recovery appear to be taking more of a "U" shape than a "V"... but everyone hopes it's not an "L." The Economic Cycle Research Institute's Lakshman Achuthan said that despite Thursday's sensational finish, he sees no real recovery until there's some meaningful improvement in the job market.
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Oil Caught In Market Storm
The Energy Information Administration's senior market analyst Doug MacIntyre said it's still impossible to put a bottom on the oil market: The question used to be, "Where is the next barrel of oil going to come from to meet demand?" but now it's, "Where is the demand going to come from?"
Calming That Storm: What's Needed Now
Goldman Sachs vice chairman Robert Hormats said the formula for economic recovery is not unregulated capitalism, but well-regulated capitalism. BlackRock's Bob Doll says investors must still keep their seatbelts on, but they can now loosen their shoulder harnesses. Stuart Schweitzer of JPMorgan Privare Bank quoted FDR as saying recovery lies in "social values more noble than mere monetary profit."
Buy Debt-Free Companies — With Reliable Earnings
Delphi Management's Scott Black said the stock market is still "a random walk." Short-term investors ought to stay in cash equivalents like Treasurys; long-term investors should go for companies with "sustainable earning power and bulletproof balance sheets."
Fund Managers Split on Market Outlook
Eugene Peroni of Advisors Asset Management said he detects a bottom in stocks, while JPMorgan's David Kelly said things are still too shaky for technical analysis to show any clear indication. Kelly called on long-term investors to make cautious moves in large-cap stocks, while Peroni saw opportunities in all of the capitalization tiers.
Stock Picks: Rated 'G'
Peter Costa of Eckhart & Co. likes three high-profile stocks, all heavy hitters in their sectors, and all of which begin with G: (CNBC parent) General Electric, defense giant General Dynamics, and Goldman Sachs. He says all three companies are 'a steal' right now.
CNBC's Companies in the News:
Citigroup (NYSE: C)
Nokia (NYSE: NOK)
Sun Microsystems (NASDAQ: JAVA)
General Electric (NYSE: GE)
Goldman Sachs (NYSE: GS)__________________________________ For more stories from CNBC, go to cnbc.com.