Investors Beware of 'Very Serious Long-Term Structural Issues'
CNBC.com Writer
Markets opened lower Tuesday, with the Dow down more than 200 points, as the dollar firmed amid worries about the European debt crisis. Uri Landesman, president of Platinum Partners, and Ethan Anderson, portfolio manager at Rehmann Financial, discussed their outlooks.
“Volatility is back for now, but we’re at an inflection point as far as the markets go,” Anderson told CNBC. “You have relatively low interest rates and a lot of cash on the sidelines, which should keep the markets from dropping significantly.”
Anderson said it’s getting harder to excite investors even after earnings have consistently beaten expectations and companies are seeing topline growth.
“Now, we need jobs growth to keep this market going higher,” he said.
In the meantime, Landesman said the markets are trading in a “tight technical range” on the S&P 500.
“We’re between 1,183 and 1,230 and we’re going to hold near 1,183, bounce around that range, and then possibly go as high as 1,275 to 1,300 before settling a little bit,” he said.
The U.S. recovery is doing “very well” and earnings have continued to surprise to the upside, he added.
However, Landesman cautioned that there are some “very serious long-term structural issues” that the U.S. will have to deal with in terms of budget deficit.
“Government spending is going to have to start being constrained somehow and we’re going to have to gradually absorb some of that with real demand from the enterprise and from consumers,” he said.
More Market Analysis:
- Stocks Still Good—But Get Out of Cyclical Ones: Strategist
- Sell in May? Here's a Better Way to Invest
- Bob Doll: Stocks' Path of Least Resistance Is Up
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Tuesday's Dow Leaders (as of this writing):
Caterpillar
Boeing
American Express
Cisco
JPMorgan
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Disclosures:
No immediate information was available for Anderson or Landesman.
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