Skip navigation
MOST POPULAR RELATED TAGS
  • TOPICS
  • SECTORS
  • COMPANIES

Current DateTime: 06:30:46 10 Nov 2009
LinksList Documentid: 24355697
powered by digg
See all Play-by-Play postsSee all Power Lunch posts
Text Size
Jul.02
1:05 PM ET
Monday, 2 Jul 2007
Hedge Funds Could Be Driving Market Rally

Jack Ablin, chief investment officer at Harris Private Bank, told CNBC’s “Power Lunch” that hedge funds may be driving today’s market rally.

“We’re getting new money at quarter end, we’re seeing a lot of speculative issues leading the way, particularly small-cap, and at the same time, short interest in large cap is moving higher,” Ablin said Monday. “So, it could be a lot of hedge funds in today.”

He said difficulties in the sub-prime mortgage sector are still unfolding, and many adjustable rate mortgages haven’t yet been re-pegged to a higher rate.

“You certainly have to worry about it on the consumer side,” Ablin said. “Clearly, if people are failing to make payments on their homes, chances are they’ve already failed to make payments on their cars, credit cards and other expenses. Then (comes) the (fallout) into the hedge fund space (like) Bear Stearns. Is it an isolated event or is it a broader contagion?”

Ablin said he likes healthcare stocks because valuations are cheap.

“Price-to-cash-flow is the cheapest it’s been in about 15 years,” he said.

Thomas Melcher, chief investment officer at Hawthorn, PNC’s unit for ultra high net worth clients, said he’s not worried about interest rates at current levels.

“In the U.S., the fact that valuations in the large-cap stocks are still somewhat attractive, I think is one factor that could propel the market higher,” Melcher said. “Second, even though the market is slightly disappointed that the Fed appears it is not going to be lowering interest rates before year’s end, the 10-year (bond) is back over 5%, the Fed is holding steady at 5.25%, and I don’t view interest rates as being competitive with stocks at this level. The third thing we have going for us is in the third year of a presidential term, typically the market turns in relatively good results.”

© 2009 CNBC.com

Tools:
PrintEmailAdd This share icon
  • digg share

CNBC HIGHLIGHTS

  • From politicians to CEOs to companies, here's your chance to vote for the winners and losers of 2009.
  • With prices well below peak, gems could add some sparkle to your investments.
  • On the anniversary of the fall of the Berlin Wall, many in the former Eastern Bloc recall communism fondly.
  • Do free market libertarians really believe what they say about ethics and shareholder value? The Big Money takes a look.
  • Jim Cramer
  • Cramer did the research and found eight stocks that lead the pack. Read on to get his top picks.
  • The health care reform bill that passed the House on Saturday will have a much harder time in the Senate.
ADD COMMENTS
Remaining characters


Current DateTime: 06:23:05 10 Nov 2009
LinksList Documentid: 29778428

Current DateTime: 01:04:27 10 Nov 2009
LinksList Documentid: 29779196

Current DateTime: 06:22:21 10 Nov 2009
LinksList Documentid: 29779199

Current DateTime: 01:06:24 10 Nov 2009
LinksList Documentid: 29779198
  Data is a real-time snapshot  *Data is delayed at least 15 minutes
Global Business and Financial News, Stock Quotes, and Market Data and Analysis

© 2009 CNBC, Inc.  All Rights Reserved.
A Division of NBC Universal
Thomson ReutersThomson Reuters