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I'm Still Bullish on This Market: Portfolio Manager

Stocks continued to pull back on Friday as worries about the European debt crisis overshadowed somewhat encouraging U.S. economic data. Andrew Kanaly, chairman of Kanaly Trust Company, and Art Nunes, portfolio manager at IMS Capital Management, discussed their market outlooks.

“We’ve been in a cyclical bull market for 14 months and the primary trend remains higher,” Nunes told CNBC.

“We find ourselves in the third correction in this bull market and, so far, the primary trend at the 200-day moving average is holding just fine.”

Nunes said earnings and sales are recovering and expects them to accelerate higher.

“We have plenty of liquidity on the sidelines and we have a healthy dose of bearish sentiment on the sidelines — people that have not participated in this market — so we’re still bullish from here,” he said.

In the meantime, Kanaly said he is backing off on European stocks, maintaining his dollar position and hanging onto gold. He added that investors are still concerned over the European sovereign debt crisis.

“They raised over a trillion dollars and that has the market wondering how much money they need to fix the PIIGS and not before long, they’re going to be wondering about U.S. deficits and how sustainable those are,” he said.

“Treasury auctions are starting to get soft and so everyone’s eyes are on how much debt globally we can sustain against a very slow growing GDP.”

*PIIGS: Portugal, Italy, Ireland, Greece and Spain

  • Watch Kanaly's Previous Appearance on CNBC (May 4, 2010)
  • Watch Nunes' Previous Appearance on CNBC (Mar. 29, 2010)

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Friday's Dow Laggards (as of this writing):

American Express

Hewlett-Packard

Intel

Caterpillar

JPMorgan Chase

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Disclosures:

No immediate information was available for Kanaly or Nunes.

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Disclaimer