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‘Something Has to Break’: Terranova

Investors should look past the upcoming economic data, Joe Terranova of Virtus Investment Partners said Monday on CNBC.

"I continue to stay long crude oil futures," he said, adding that technology's strong performance works for his long IBM position.

On "Fast Money," Terranova said that he was shifting focus as the stock market saw more gains midday.

"I still say I want to sell Treasuries in May, which I did today by buying the TBT, and go away," he said. "I just don't see equities continuing to go up and bonds as well. Something has to break."

Terranova rejected the characterization of his positioning as "cautious."

"I'm actually very aggressive. I can't be cautious," he said. "I'm long mini S&P futures. I believe the market's going higher."

Terranova said that he saw the Federal Open Market Committee as a sort of backstop to the stock market.

"I actually want to look past what we're all highlighting here, which was lousy earnings," he said. "And if we do get a poor unemployment report, I'm OK with that because I know the FOMC has kind of got my back with it. So, the only thing that I'm right now cautious about is the ability for Treasuries to continue doing what they're doing."

TheStreet CIO Stephanie Link noted a sector rotation in the market.

"Last week to me what was the most interesting is that you saw a leaning toward the cyclical stocks," she said, noting that cyclicals rose 3 percent on the week vs. the consumer staples, which were flat.

"I want to see if this rotation continues because if it does, then maybe this market doesn't have to have this major correction. You're just going to see this rotation into stocks that actually have lagged."

Link noted names such as Kellogg and Kraft, whose stocks were priced at a 17 multiple and gained 15 to 20 percent year to date.

Meanwhile, she added, shares of Cummins, CBI and Fluor were trading at a 12 multiple and had gained 3 percent on the year.

Simon Baker of Baker Street Asset Management said that he would be cautious after "kind of lousy" earnings, naming that AIG could be worth a look because of "low expectations," as well as its dividend and trading at about one-half of book value.

"Ahead of the Friday job number, which I think is going to be the big catalyst, I'd have a little bit of cash," he added.

Symbol
Price
 
Change
%Change
OIL
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US 10-YR
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TBT
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S&P FUT
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K
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KRFT
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CMI
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CBI
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FLR
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AIG
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