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Current Rally Has Legs, but New Highs Demand Caution, Analysts Say

Thursday, 3 May 2007 | 2:06 PM ET

Jim Fisher, senior portfolio manager at M&T Bank Investment Advisors, told CNBC’s “Power Lunch” that he’s “cautiously optimistic” about the sustainability of the current market rally.

“If you look at the charts starting in mid-March, we’re in nosebleed territory right now,” he said Thursday. “That’s not to say I’m not still bullish, but there is some caution at the levels we’re at now.”

Market Mavens
Discussing whether the market can continue its climb, with Howard Rosencrans, Capital Growth Financial chief research analyst; Jim Fisher, M&T Investment Advisors vp & sr. portfolio manager and CNBC's Sue Herera

Fisher said he doesn’t expect the slowdown in corporate profits to be as severe as many predict and noted that many companies beat first quarter consensus earnings estimates.

Howard Rosencrans, chief research analyst, Capital Growth Financial, took a cautious view.

“I still think it’s going to shake out at the end of the day,” he said. “People are going to look at corporate profits which are now at a very slow-growth phase, coming up this year at about 5%. People are going to look at GDP growth decelerating, at housing and the ramifications of significantly tightening credit. They’re going to look at the absence of cash in mutual funds for availability to deploy into assets. There’s a lot on the plate and it’s not going to be overlooked forever simply (because of) this bath of private equity.”

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  • Sue Herera is a founding member of CNBC, helping to launch the network in 1989. She is co-anchor of "Power Lunch."

  • Tyler Mathisen co-anchors CNBC's "Power Lunch." Mathisen also co-anchors "Nightly Business Report produced by CNBC."

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Kenny Polcari