By Senad Karaahmetovic

They are currently down Tuesday morning following a temporary rally that took place last week. lost 64 points in early Tuesday trade, or 0.19%, while S&P 500 futures were down 0.2%. However, the S&P 500 futures advanced by 0.08%.

Futures futures are falling after they posted their largest weekly gains for nearly two years. After an eight-week losing streak, the DJIA finished the week in green at 6.2%. The S&P 500 was up 6.5% for the week, while the jumped 6.8% after being in the red for weeks.

After a few retail businesses reported higher-than-expected earnings reports last week, the rebound occurred. A large part of last week’s gains occurred on Friday, with the DJIA rising over 550 points and the S&P climbing 2.5%. Due to good financial reporting from tech companies and the downturn in the economy, Friday’s 3.3% Nasdaq gain was driven by decent financial statements.

Investors and analysts are now debating whether last week’s rally indicated that the stocks touched a bottom as they remain far from their high points. These are the thoughts of prominent Wall Street strategists.

Morgan Stanley’s Michael Wilson: “Higher inflation and slower growth are now the consensus view but that doesn’t mean it’s fully discounted. As equity prices rise, so will the Fed’s hawkishness. A falling PMI suggests at least 10 per cent risk while a possible recession would bring about even more. Sustainable rallies will require growth rates to bottom, something we don’t foresee until later this year.”

UBS’s Keith Parker: “Our analysis supports our core views: 1) equity risk/reward is improving with the S&P 500 oversold by 4ppts as recession fears ratchet higher, 2) the greatest opportunities are within cyclicals vs defensives where the dislocation from fundamentals is at the most extreme level since 2012, 3) quality remains attractive given it provides important downside protection and valuations are cheap vs prior late-cycle averages, and 4) we seek stocks with attractive upside vs downside in volatile markets.”

BTIG’s Jonathan Krinsky: “Ultimately, we continue to think 3,400-3,500 is likely, but it’s probably a late summer or early fall event. In 2000 and 2008, it took 18-months and 11-months, respectively, of weak markets and then some sort of ‘event shock’ like 9/11 or Lehman to get a surge above 40. A momentum shift in sector performance is the bigger immediate event. This is the worst level of performance in 13 years. This means energy should be vulnerable into a seasonal weak time of year, while tech/ growth/long-duration should be able to bounce further.”

Citi’s Scott Chronert: “Over the near term, our high-level takeaway is that the equity markets have reached a peak bearishness related to Fed expectations and recession risk. As volatility moves down one stock’s path, we expect it to continue. With the Q2 reporting period approaching, we expect to see more evidence of this.”

BMO’s Chief Investment Strategist Brian Belski: “Recent price trends suggest to us that the [Communication Services]The sector might be on the verge of a major turnaround. Due to recent performance problems, the sector has seen significant valuation reductions. The largest stocks in terms of market cap saw their forward P/E multiples drop to March 2020 levels. There is no comparable valuation for other sectors. We are aware that earnings growth in the aggregate has been slow but not unimportant. However, quality attributes like return on equity, free cash flow yield and return on equity have risen to new multi-year heights. Communication Services, as a quintessential investment option, is our recommendation. Indeed, we recommend that investors maintain positions within secular growth names, while tilting portfolios more toward the value-oriented and dividend-paying areas of the sector.”