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Pros Say: Financials Still Too Weak for Growth

Published: Tuesday, 14 Jul 2009 | 11:36 AM ET

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By: JeeYeon Park
CNBC News Associate

Stocks limped out of the gate on Tuesday as the first real test of the new earnings season brought mixed results and investors fretted over inflation concerns. Larger-than-expected gains in producer prices and retail sales for June presented conflicting signals on the economic front. Producer prices rose 1.8 percent on the strength of autos and energy sales, while retail sales were up 0.6 percent, also on the energy-auto movement. Read and listen to what the experts had to say...

Expect Subdued Growth for Rest of ‘09

James Falkiner of Falkiner Global Investors said he sees subdued growth for the rest of this year. “The financials sectors are still too weak and any growth we get will be anemic,” he said. “We’ll still see unemployment rising and consumer spending quite subdued.”

Business Inventories Fall for Ninth Straight Month

Bond Market to Stall in Short-Term: Strategist

"We've had a very strong run in bond markets over the past four weeks as people rethought the V-shaped scenario and some of the economic data," said Charles Diebel from Nomura. "In the short-term, we're going to see a range-bound, fairly choppy market activity develop both in risk assets and in government bonds."

Tech: The Next Market Leader?

Ned Riley of Riley Asset Management said the tech sector will be the next market leader. “Tech stocks as measured by the Nasdaq 100 has been up 22 percent this year,” he said. "The tech sector has really been the leadership." He expects more cap spending on tech-related activities.

Where the Earnings Surprises Will Be: Strategists

Obamanomics Has ‘Failed’

“We never had a first economic stimulus,” said Rep. Jeb Hensarling (R-Texas). “We had a big stimulus package for big government, costing American taxpayers 1.1 trillion.” He said Obama’s economic plan failed. “We want to give tax relief to small businesses… [and] quit having Washington meddle in this bailout mania of taking over corporate America. That will get the economy moving again,” he said.

Waiting for the Economic Recovery

We are currently in a period of “worry and nerves” as we wait for the economic recovery to materialize, said Guy Monson of Sarasin & Partners. “The price-earnings ratio is rising and so stock valuations are appearing exceedingly expensive…So you’re getting investor vertigo on these valuations,” he said.

'Investor Vertigo' Will Pass: Strategist

Is U.S. Sliding Into Socialism?

As Obama and the current administration prepare to move forward with a major health care overhaul, some key Republican leaders like Sen. Jim DeMint (R-S.C.), are warning against a national slide into socialism. “Americans have become increasingly dependent on the government and as we do, the government grows and continues to spend and borrow—and it’s pushing out our prosperous economic system,” he said.

US-China Relations Have Improved ‘Enormously’

"The relationship between China and the U.S. has improved enormously since Obama came in," said Stephen Perry of the 48 Group Club. "Obama sees China and Russia as key players for solving the world's international crises."