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Fed party not over for banks: Pro

Financial stocks could be headed higher next quarter along with the broader market, Argonaut Capital President David Gerstenhaber said Tuesday.

"I think that you have a fourth-quarter rally," he said. "You may have some indigestion this week but into fourth quarter stocks perform relatively well."

(Read more: Stocks log 4-day losing streak on Fed uncertainties, S&P 500 ends below 1,700)

On CNBC's "Fast Money," Gerstenhaber noted that while there were short-term headwinds for the overall market, the trend was still higher.

"On a short-term basis, you've got problems with continuing resolution, the debt-ceiling issues. And we also have rebalance portfolios coming into the end of the month, where you may very well see selling of stocks and buying of bonds," he said.

(Read more: Top bank analyst Mayo: This stock to double)

Gerstenhaber said that the Federal Reserve's decision to continue its $85 billion-per-month asset-purchase program remained a positive factor for stocks.

"So, I don't think it's all that surprising that the market's having a little bit of indigestion this week, but in terms of what's happening big-picture, the Fed is still highly accommodative," he said. "Wwe ought to anticipate that that's going to carry things higher.

"Now, that's self-limiting because unless we get earnings growth, or enough earnings growth, the market can't move that much higher. But I really don't see the risk of a significant setback to this environment."

(Read more: Momentum stocks are the most vulnerable: Joe Terranova)

For the financial sector, Gerstenhaber said that "the biggest problem" for stocks was that the economy doesn't grow fast enough, citing Citigroup's cuts in the face of a slowdown in the housing recovery.

But overall, he added, the climate was positive.

"As long as the economy is firm enough, these banks ought to do well," he said. "I'm not too worried about the yield curve flattening all that very much. It's still very, very steep in the grand scheme of things."

Gerstenhaber said that the run-up in financial names such as Blackstone, the economic environment would continue to benefit the stock.

"This is the perfect sort of environment for them to realize their investments, and the stock's not particularly expensive," he said. "So, yes, it's moved up, but they're in the sweet spot at this point."

A stock like that of JPMorgan would trade higher along with the market, Gerstenhaber said.

"I like the stock, but it's going to trade with the large financials for the time being," he added.

By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.

— CNBC's Torrey Kleinman contributed research to this report.

Trader disclosure: On Sept. 24, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long MSFT; Guy Adami is long AGU; Guy Adami is long NUE; Guy Adami is long BTU; Guy Adami's wife, Linda Snow, works at Merck; Pete Najarian is long calls AAPL; Pete Najarian is long calls C; Pete Najarian is long calls WFC; Pete Najarian is long calls INTC; Pete Najarian is long calls YHOO; Pete Najarian is long calls FB; Pete Najarian is long calls MSFT; Pete Najarian is long calls UAL; Pete Najarian is long calls JBLU; Pete Najarian is long BX; Pete Najarian is long MRK; Pete Najarian is long BMY; Pete Najarian is long FE; Brian Kelly is long treasury note funds ; As of 9/19 Steve Grasso is long BA; Steve Grasso is long BAC; Steve Grasso is long BBRY; Steve Grasso is long GDX; Steve Grasso is long GOOG; Steve Grasso is long HERO; Steve Grasso is long HPQ; Steve Grasso is long MHY; Steve Grasso is long LNG; Steve Grasso is long MJNA; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long QCOM; Steve Grasso is long S; Steve Grasso is long ASTM; Steve Grasso is long POT; Steve Grasso is long DECK; Steve Grasso is long DHI; Steve Grasso is long EEM.

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