Economist Mohamed El-Erian said the sell 'everything' moment for investors has passed, but he cautioned against rushing into stock indexes because he believes more volatility is ahead.
El-Erian argued investors should be selling companies that face the real prospect of bankruptcies due to the economic shock from the coronavirus, which has now infected"We're going to have bankruptcies, and bankruptcies unfortunately destroy the capital structure completely," he said.
But El-Erian said there are other stocks he is "comfortable" buying right now as all three major U.S. indexes remain more than 20% below their all-time highs in February. These companies "have rock-solid balance sheets. They have a ton of cash. They're cash drain is very limited, some of them are still accumulating cash," he said. "These are not only going to survive. They're going to emerge to a landscape that speaks to their strengths.". As of 8:01 a.m., futures for the Dow were barely negative while S&P 500 and Nasdaq futures were modestly higher.
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