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Inflation & Interest Rates Loom 'Like a Dark Cloud': Strategist

Many on Wall Street believe what happens in January dictates trading for the rest of the year—the so-called January effect. So what should investors expect this month? Peter Boockvar, equity strategist at Miller Tabak, and Stephen Wood, chief market strategist at Russell Investments, shared their views.

“The global economic recovery story is a real one, but it’s definitely fragile,” Wood told CNBC.

“The time now to make extreme bets is probably not there.”

Wood said he expects the GDP to be in the high 2 percent range in the first half of the year and will rise to 4 percent by year-end.

“So the January effect—be careful—clichés are always priced into the markets,” he warned.

In the meantime, Boockvar said he is most concerned about the bond market and its effects on equity prices.

“The bond market is beginning to tighten policy for the Fed and that is the major speed bump that we follow,” he said. “Because of the policies of the Fed [and] artificially low interest rates on any economic recovery this year, I think inflation and interest rates follow us like a dark cloud.”

Wood Likes:

S&P Technology

S&P Consumer Discretionary

S&P Energy

S&P Financials

Boockvar Likes:

Gold Comex (Dec)

RJ CRB Index

MSCI Emerging Markets

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Disclosures:

No immediate information was available for Boockvar or Wood.

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