US Markets

With lack of catalysts for the market, time to get a bit more defensive: Expert

Key Points
  • Tax reform is the next leg up for growth, but first health-care has to be resolved, Nancy Tengler said.
  • She believes now is the time to upgrade the quality of your holdings by trimming back winners.
  • David Katz thinks the market fundamentals are still good, so he would look for names that have had good earnings but have pulled back.
Market breather is perfectly normal: Expert
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Market breather is perfectly normal: Expert

Stocks have been trading in a narrow range and there really isn't a catalyst right now to push them higher, expert Nancy Tengler told CNBC on Monday.

The market has already digested "fabulous" first-quarter earnings and now the Republican health-care bill may take some time to move through the Senate, the chief investment officer at Heartland Financial explained.

The legislation, passed by the House of Representatives last week, faces an uncertain future in the Senate, where several members have suggested they will develop their own plans.

"Now it begs the question, well when are going to see tax reform because that's really the next leg up for growth," Tengler said in an interview with "Power Lunch."

Traders work on the floor of the New York Stock Exchange (NYSE) in New York.
Michael Nagle | Bloomberg | Getty Images

David Katz, chief investment officer at Matrix Asset Advisors, believes it is "perfectly normal" for the market to take a breather.

"If you have a six-to-12-month time horizon, we'd look at some of the things that have already had their pullback and take a longer-term view because we think things are fundamentally pretty good with the market," he told "Power Lunch."

He likes names like TE Connectivity and Occidental Petroleum, which he said have had pullbacks despite posting good first quarters.

Tengler is getting "a little bit more defensive" in this environment.

"This is the time when you upgrade the quality of your holdings and you do so by selling and trimming back on your winners," she said.

Tengler cut back on shares of Apple and financials in the first quarter but still likes health-care stocks right now.

— Reuters contributed to this report.

Disclosures: Matrix clients and Katz own shares of TEL and OXY. Tengler owns shares of AAPL.

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