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Markets to Rise 11-14% by Year-End: Equity Analyst

Wednesday, 19 May 2010 | 1:10 PM ET

Stocks slid Wednesday amid worries about increased market regulation—but a tame inflation report helped curb losses. James Shelton, chief investment officer of Kanaly Trust, and Kim Caughey, vice president and senior equity analyst at Fort Pitt Capital Group, discussed their market outlooks.

The Early Tick
Insight on the morning markets, with Kim Caughey, Fort Pitt Capital Group.

“What we’re seeing now is a flight to safety,” Shelton told CNBC.

“With the dollar rising, you’re seeing a reversal of the dollar carry trade and it’s going to last a while.”

Shelton warned investors that the problems in Europe are not going to be easily solved and expects the austerity moves to result in lower growth.

“We’re going to have to deal with a lower rate of global growth, particularly out of Europe, but I think it does benefit the U.S.,” he said. “We are in a little bit of a better shape and fantastic earnings in [America].”

In the meantime, Caughey forecasts a 11 to 14 percent increase in the markets by year-end.

“Because we had problems in 2008 and 2009, our corporations are lean and mean and they are ready for a lower growth environment,” she said. “This year is showing that these companies can still come up with earnings and that’s what we’re looking at.”

Opposing Views:

Sell it All, Risk of 'Major Crash': Dow Theory’s Russell

Why Dow 5000 Is Still 'Very Likely': Strategist

Second Opinion?

Pros: US Blue Chips Are 'Best Place' for Investors

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CNBC Data Pages:

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CNBC Slideshows:

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Wednesday's Top Dow Laggards (as of this writing):

Boeing

Caterpillar

DuPont

United Technologies

Microsoft

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Disclosures:

No immediate information was available for Caughey or Shelton.

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Disclaimer

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