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Strategist: Low Rates, Strong M&A Good For Brokerages

Tuesday, 6 Mar 2007 | 9:14 AM ET

Jason Trennert says that people looking at the past week's whipsaw market are looking at the wrong things -- at least, when it comes to the health of big brokerage houses. The chief investment strategist of Strategas Research Partners joined "Closing Bell" to weigh in on the Wall Street giants.

Trennert told CNBC's Maria Bartiromo that fears of a "contagion effect" from factors such as the subprime credit crunch are "premature."

Subprime Situation
Discussing the sub-prime lenders impact on the markets, with Jason Trennert, Strategas Research Partners, LLC chief investment strategist & managing partner; Steve Liesman, CNBC senior economics editor; Ron Insana, CNBC senior analyst and CNBC's Maria Bartiromo

He took on CNBC's Ron Insana, who mused that many analysts think subprime is too small to hurt the overall market -- "but they said the same thing about the Thai baht." Trennert maintained that the size of the subprime subsector is beside the point: The three factors that drive brokerages are interest rates -- similar to housing -- trading volume, and mergers and acquisitions. And Trennert declared that long-term rates are low, M&A has been "very strong," and trading volume "pretty good."

The strategist is overweight on financial stocks, and calls private equity also "very favorable" for brokers. He told Bartiromo, "I'd be a buyer on weakness."

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  • With almost 30 years experience in business television, Bill Griffeth is co-anchor of the 3 p.m. ET hour of CNBC's "Closing Bell."

  • Kelly Evans

    Kelly Evans is an on-air correspondent, reporting across CNBC's business day programming. She is co-anchor of CNBC's "Squawk on the Street."