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Pros Say: Enter the Markets in Q3

Published: Wednesday, 24 Jun 2009 | 10:44 AM ET

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By: JeeYeon Park
CNBC News Associate

Stock gains continued to erode after the Fed said it expected to keep interest rates exceptionally low for an extended period. The Fed said that the "pace of economic contraction is slowing" but that it "continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal-funds rate for an extended period." Read and listen to what the experts had to say…

Enter the Markets in Q3

A good time to invest would be in the third or fourth quarter, said Patrick Shum of BMI Fund Management. “Most of the economy is now in an L shape—so we don’t see any significant recovery any soon,” he said. “Most of the stock markets will have a 10 to 15 percent correction in 3rd quarter and it is a good time for investors to enter [the market] then.”

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Positive Growth in Second Half ‘Not a Surprise’

Anthony Chan of JPMorgan’s Private Wealth Management said the U.S. will see a second-half recovery, but this should not be something that surprises investors. With $1.9 trillion in fiscal deficit, and the central bank expanding their balance sheets, “it should not come as a surprise that we’re going to get some sort of bounce back and some small positive growth,” he said.

Fed to Keep Calm, Reassure Markets

Don’t expect the Fed to come in with “guns blazing” when it wraps up its two-day meeting, said Stephen Gallo of Schneider Foreign Exchange. “They don’t want to create any sense of urgency, but I think they’re going to reassure markets that rates aren’t going to firm, and that monetary policy isn’t going to be tightened in the very short term,” he said.

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Dollar to Show Weakness in Summer

The US dollar is coming into a period of weakness, said Chris Locke of Oystertrade.com Management. “Cracks have been starting to show” since several weeks ago, he said, referring to the price of dollar/yen and the dollar/Swiss franc. “I see this as a weak period for the next 2 to 3 months,” he said.

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Difficult Period for Emerging Markets

Stefan Hofer of Julius Baer sees a difficult period ahead for the emerging markets. “This year, the performance has been very good—up almost 30 percent,” he said. However, he said in this consolidation period, investors have to be cautious about emerging markets in the short-term.

The Cost of ‘Cap and Trade’

The Congressional Budget Office released a report last week finding that cap-and-trade energy legislation would cost the average American household $175 a year. Larry Bossidy, former CEO of Honeywell said while it would be nice to pass the legislation, “it’s one of those things that I would argue, is not be on our priority list.”