I am not of the view that we’re going to go into a 20 percent downdraft. We are buying to take advantage of this weakness…Emotion and political circumstances are dictating the short-term move, and understandably,” Birinyi said. “But ultimately it comes down to good companies and proper valuations, and I don’t think there’s a big issue.

—Laszlo Birinyi: via Bloomberg. He would go on to observe, “For all the fear and concern, gold is coming in pretty significantly.”

It is unlikely that the U.S. economy can shrug off the troubling developments in the euro zone. The manufacturing rebound may be cooling a little bit from the torrid pace we’ve seen. There may also be disappointments on the retail side.

—John Herrmann, senior macro strategist at State Street Global Markets: via Bloomberg

While they feel better about the recovery, there are still question marks. The Fed is on hold into 2011 and waiting for a window of time before we see a pivot in policy.

—Paul Ballew, a former Chicago Fed economist, senior vice president at Nationwide Mutual Insurance: via Bloomberg.

Since this meeting you’ve had a crisis unfolding in Europe which forced the Fed to have an emergency meeting in early May to reopen swap lines they had only just mothballed. That means the Fed will be more dovish now than they were before.

—Paul Ashworth, senior economist at Capital Economics, Toronto: via Bloomberg.

There have been rumors of intervention by central banks. Most of the movement you’ve seen has been weaker commodities, weaker emerging market currencies and weaker commodity currencies, all correlated with the belief that the recovery may not be as strong as previously expected.

—David Rolley, Loomis Sayles & Co, overseeing $106b in fixed income: via Bloomberg. Though not mentioned in the quote, the Fed did re-open up its swap agreements with the ECB, which would explain some of the stability to strength in the Euro.