US Markets

Brace for recession next year: Advisor

Closing Bell Exchange: Next year a recession?
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Closing Bell Exchange: Next year a recession?

Right now the economic trend in the United States is positive, but the "party" for the market will come to an end later this year and a recession will likely hit in 2016, a market expert told CNBC on Thursday.

"The market looks for recessions. It's forward looking. I think next year is when the recession will come so if you back it up six months it puts us into the end of this year when I think the bear market starts," Ken Moraif, a senior advisor with wealth management and investment firm Money Matters, said in an interview with "Closing Bell."

Moraif contended that prosperity triggers a recession because of oversupply.

"The businesses in the economy want to supply the demand. So everybody stocks up on inventory, homebuilders build tons of houses and then all of a sudden there's this massive oversupply," he said.

"I think everybody is going to try to stock up with as much as they can. They don't want a customer to walk in and not be able to buy their product or service."

Timothy A. Clary | AFP | Getty Images

In the meantime, he said he would use the current market volatility to buy the dips.

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However, Omar Aguilar, chief investment officer of equities at Charles Schwab Investment Management, told "Closing Bell" the U.S. is very far away from a recession.

"There is still plenty of liquidity that is being promoted overseas and that always is beneficial for the U.S.," he said.

On top of that, "the Fed already hinted at they're going to be very, very measured in the way they raise rates."

While Jim Cahn, chief investment officer of Wealth Enhancement Advisory Services, sees greater growth in the United States, he'd rather invest in Europe and Asia.

That's because he doesn't necessarily believe that markets follow the economy.

"Over the last 100 years, the years in which the stock market has actually performed the best have been years in which growth actually contracted because the best performance in equity markets is generally when you're coming out of the bottom of the cycle," Cahn said in an interview with "Closing Bell."

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In Europe, there are large changes in gross domestic product, he added.

Europe is also on the radar of Greg Sarian, managing director and partner at HighTower, because of the quantitative easing program now underway. He also thinks profit margins are more attractively valued in Europe than the U.S.

Meanwhile, investors in the U.S. should be prepared for more volatility.

"I'm concerned about first-quarter earnings season. I think this dollar strength is going to put pressure on corporate earnings. This market needs earnings to be good to go higher," Sarian said, also on "Closing Bell."