Markets Can Rise 5-10% in the Near-Term: Strategist

Stocks slid Tuesday morning, after soaring to new 2009 highs on Monday, as a report showed the economy grew less than expected in the third quarter. Douglas Roberts, founder and chief investment strategist at Channel Capital Research.com, and Dean Barber, founder and president of Barber Financial Group, shared their views.

CNBC Market Edge
CNBC Market Edge   

“There could be some good gains" in the next 2 to 4 months, Barber told CNBC. "Maybe another 5 to 10 percent upside on the overall markets."

"But long-term, too many difficulties lie ahead and the main issues that we see are in the credit markets,” he cautioned.

Barber said he is worried about a lack of action to reduce debt levels, especially on the corporate and individual family side. Additionally, he is concerned about the rising rate of unemployment.

“[Companies’] long-term ability to continue to be as profitable as they are is going to rest on the shoulder of the consumer—and the consumer’s got to have a job, to spend,” he said.

In the meantime, Roberts said although he is also bullish in the near-term, he fears that government stimulus is the primary driver of the recovery.

“The government has become a lender and spender of last resort,” he said.

“Even if you look at the GDP numbers, you’ll see that the consumer spending aspect was driven by government programs, so the real question is how long will this last?…I don’t see anything after government stimulus that’s going to bring the economy back to where we were before.”

Recommendations:

Roberts Likes:

Technology

Health Care Pharmaceuticals

Energy MLPs (Master Limited Partnerships)

Robert Dislikes:

Utilities

Barber Likes:

Health Care

Energy

Consumer Staples

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Top Technology Companies:

Apple

Google

Microsoft

Intel

Hewlett-Packard

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Disclosures:

No immediate information was available for Barber or Roberts.

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