Market Overview

Here's Why The Current Stock Pullback Is 'Healthy'

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March still has one full trading day remaining, but as it stands, the major indices are trading in the red for the month. As such, major indices are in threat of posting their first monthly loss going back to October.

This isn't necessarily a bad thing, at least according to S&P Global's Chief Investment Officer Erin Gibbs.

Speaking as a guest on CNBC, Gibbs explained the stock market's current pullback is "healthy" for the basic reason that one month's performance isn't enough to jump to a conclusion over longer-term performance. Aside from that, she argued the stock market's valuation has indeed become "so high and so rich" as of late that a pullback to a more "reasonable" valuation level is a good thing.

Gibbs said earnings season is less than one month away and it would be appropriate at that time to "start worrying about what's going to happen for the rest of the year."

Small Loss For March

Matt Maley, an equity strategist at Miller Tabak, jumped in and noted March's decline is small and won't even be observable on some charts. Much like Gibbs, Maley would prefer to see a decline in the market, not a big correction or the start of a bear market.

Maley also suggested it would be nice if the U.S. congress finally gets "blamed" for something after "getting a free ride for a decade or longer."

"If things finally got down a little bit, if [Congress] finally got the blame for a few things, they'd finally get off their duffs and make a few structural changes that we need, to take the place of the monetary stimulus we've been getting for so many years," Maley said.

 

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