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The Real Issue That May Pressure Markets: Analyst

Stocks rose on Tuesday amid hopes that the EU would step in to bail out Greece. Does this provide enough confidence and trust for investors to return to the markets? David Sowerby, chief market analyst and portfolio manager at Loomis Sayles & Co., and Lawrence Glazer, managing director at Mayflower Advisors, discussed their insights. (Scroll down for Sowerby's stock picks.)

“Most investors realize that Greece is a relatively small country—they have relatively small exposure in most portfolios,” Glazer told CNBC.

“But Spain, Portugal, Ireland are bigger countries and bigger issues that come closer to home.”

The crisis caught investors by surprise, said Glazer. “And investors don’t like surprises.”

In the meantime, Sowerby said the biggest overhang in the market is the lack of loan demand, rather than the issues in Greece.

“Banks are still not lending…that remains a bigger headwind in the near-term than the problems in Greece,” he said. “We could see another 3 to 5 percent on the downside, which would make this a quite usual 12 to 14 percent correction that we get once a year.”

He said the correction is a good buying opportunity for investors. Specifically, Sowerby likes technology, truckers and homebuilders.

“I’m able to get valuations on small and large cap companies that are trading at 10 to 12 times forward earnings—abundant level of cash flow for companies,” he said. “It’s a good time in this mini-selloff to be a net buyer.”

Sowerby Likes:

Harris

UGI

Sally Beauty Holdings

Fossil

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More Investor Opinions:

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CNBC Data Pages:

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CNBC Slideshows:

  • Cramer's 12 Stocks to Play the Recovery

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Disclosures:

No immediate information was available for Glazer or Sowerby.

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Disclaimer

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