The recent rally in stocks has run out of steam and there are no reasons for it to come back, two analysts told CNBC Thursday.
The latest round of better-than-expected earnings for some companies showed that they were good at cost cutting, but their turnover has been disappointing and this is not the route to sustainable profit, Neil Dwane, chief investment officer, equities for Europe, RCM, said.
"Generally, most people have now missed (the rally)," he said.
Changes in accounting rules in the US mean that the burden of writedowns on company profits has eased. "They can mark them back to myth and that's why we had the rally," Dwane told "Squawk Box Europe."
But the rally, which has seen the S&P rise to 18 times earnings, was not justified by fundamentals, he added.
"I think people are still complacent about the speed of recovery and type of recovery we're going to have," Dwane said. "All the asset allocators that I see say… I'd like to buy it, but I've missed the easy money."
Earnings in continental Europe will be even worse than those in the UK, as retail sales and production are down, Carl Weinberg, chief economist, High Frequency Economics, said.
"This looks very much like the dot com rally. Everybody is buying shares because everybody buys them. I don't see where the legs are here," Weinberg said. "This is just such a big disconnect (from the macroeconomic situation) that I cannot see the fundamentals for it."
Tobacco stocks, which haven't risen too much during the rally, may be a good buy, said Dwane, but added that he would wait until September to see what outlooks companies give for next year.
Bonds are Weinberg's favorite investment.
"Bonds are safe, bonds are where you want to be in a low inflation, low growth environment," he said.