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Pros Say: Markets to Fall at End of 2nd Half

Thursday, 30 Jul 2009 | 11:26 AM ET

Stocks rallied Thursday as investors were encouraged by the latest jobless report and round of corporate earnings. Jobless claims rose by 25,000 last week to 584,000 but investors were encouraged as estimates had put the number as high as 600,000. Read and listen to what the pros had to say...

Markets to Fall in Late 2nd Half of 2009

"We expect late in the second half of this year economic times to be quite difficult and earnings to disappointand therefore the market to come down," said Philippe Gijsels of Fortis Global Markets. “On the other hand, I’m a bit surprised that we’ve moved up so strongly in the last 2 weeks and that leaves us with a technical picture that has clearly improved,” he said.

Earnings Can Still Boost Stocks

Upside earnings surprises look like a firm basis to be optimistic in the third quarter, said Simon Goodfellow of ING Wholesale Banking. “But after a fantastic run over the last 2 to 3 weeks, we are going to run into a little bit of profit taking,” he added.

Expect Momentum in Q4

Alan Gayle of Ridgeworth Capital is "cautiously optimistic" on stocks. “The economy is turning the corner into the wind, but overall with valuations. So this market is not necessarily overdone,” he said. “We’re in a period of consolidation and transition from savings to revenue growth and after a period of consolidation through the summer, we’re going to go into the fourth quarter with a little bit of momentum.”

Choose Equities Over Gold

Roger Nightingale at Pointon York said he is lightening his positions in gold as he sees gold underperforming in the few years.

“Gold has had a marvelous 10 years—[but] if you look at gold over periods of 20 to 50 years, it doesn’t keep up with equities,” he said. “And since it’s done so well recently, I feel it’s rather ahead of itself and in the next 10 years, to underperform.”

Health Care Reform ‘Absolutely Necessary’

“I think the president is explaining [the health care situation] pretty well, but there are a lot of people who are adding to the confusion,” said Donna Shalala, former Health and Human Services secretary. She said it is “absolutely necessary” this year that we get the kind of reforms that give every American the opportunity to protect their families.

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