LPL Financial’s Ryan Detrick on his market outlook following March's volatility

LPL Financial’s Ryan Detrick joins Yahoo Finance's Myles Udland, Dan Roberts, and Melody Hahm to discuss his outlook for the market.

Video Transcript

MYLES UDLAND: All right, welcome back to "Yahoo Finance LIVE." Myles Udland here in New York. We're joined now by Ryan Detrick. He's a senior market strategist at LPL Financial. Ryan, I've read your stuff for a number of years, and I've always used it as a way to put in context why what's happening in the market either is significant or isn't significant. And you look at the last month, how have you been trying to think through a way to put in context for your clients and your readers just what has happened? Because really, you kind of come up with there is no parallel in history, and it leaves everyone feeling a little bit lost.

RYAN DETRICK: Well, you're right, Myles. First off, thanks for having me back. And this is not an April Fools' joke. What we just went through the past month is truly one of the most historically volatile times we've ever seen, you know, down 14% in March, down 20% in the first quarter. We've all talked about it. That's the worst first quarter we've ever seen for stocks. Dow's been around for 124 years. Again, the worst ever.

If there's any positive here, you talk about what happened in the past, what could happen in the future, we took a look, there've been six times the first quarter was down 10% or more. Again, this time we were down 20. The rest of the year, so the final three quarters, up five out of six times, up 40% on average. The only time it was down was 2001, when stocks were about flat the rest of the year.

We are not saying there's going to be a 40% rally here. But what we are saying is, hey, a big bad start, you can get a little bit of a move higher. And we think we are kind of carving out that bottom, and the second half of the year could see kind of that move higher. So it's some potential good news on a really, really bad-looking day, and obviously a bad start to a year. Terrible start to a year, really.

MYLES UDLAND: Yeah, and then kind of along those lines, I guess, when you're in an environment like this-- and seasonality in the market is something people come back to, because it actually does tend to hold up over time. But when you're in this kind of environment, does that stuff around, you know, March and April tend to be two of the better months of the year, you know, that November through May stretch tends to be better for the market, and then there's the "sell in May, go away" old saw, does that stuff tend to hold up, or are we just kind of-- you know, this year you're going to have to take it as it comes, and you can't necessarily look back with the same sort of clarity when you're in this environment?

RYAN DETRICK: Absolutely. We take it with a grain of salt. There's an old saying, "news trumps charts." And obviously, we're in an extremely news-heavy world, where everyone is focused on all the negative things and the very tragic, tragic things that are happening, and then wondering, what does that mean for the future? You know, we are in a recession. Our economy was moving along nicely. We hit a tree. We've never seen an episode like this, where the economy just simply stops. We are optimistic when we look at that double barrel, what the Fed is doing, doing anything they need to, dusting off things from '08, even things they didn't do in 2008. And then the $2 trillion fiscal plan, that's kind of a bridge is how we're looking at it, to help the consumers that are impacted, the small business that are impacted, to potentially three to four months from now when things get hopefully more back to normal, then we could see a good move higher.

One more comment. This is probably going to be the worst second quarter here, the worst GDP print we've had in our lifetime, that most people watching us right now. Maybe the fourth quarter can be the best GDP print in our lifetime if kind of things play out here.

MYLES UDLAND: And then, Ryan, just finally, when you think about the second half of this year, is there anything that you're thinking might be the tell? Is it the FANG stocks moving higher? Is it the VIX coming under a certain level? Is there anything you got your eye on for maybe July, August to say, hey, this market's now really telling you that things have been repaired and we're ready to move on?

RYAN DETRICK: Yeah, well, first things first, what we're looking for is just the peak in the new cases here in the US. We're probably three weeks away-- two to three weeks away from that. So that's one area.

But you mentioned the VIX. I mean, when the VIX is above 30, that tends to be when volatility happens and when markets are, quote unquote, "volatile and bearish." So if we can get some more calm coming in, that'd be awesome, right? 3% and 4% moves every day is not what you tend to see in a bull market, more of a slow and steady.

Real quickly, '87 crash, down 34%, took about 20 months to make those new highs. It was a nice, slow, steady move higher. Maybe that could kind of be-- Mark Twain said history doesn't repeat, but it rhymes-- maybe a scenario like that, where it takes a couple of years to get back to new highs, but it could be some potential gains, a lot of gains in the meantime, for investors.

MYLES UDLAND: All right, Ryan Detrick, senior market strategist at LPL Financial. Always good to talk to you. Thanks for calling in. And we'll talk to you soon.

RYAN DETRICK: Thank you.