Stocks Look 'Cheap' — But Expect Choppy Market
Stocks opened higher on Wednesday after seeing a selloff in the prior session. Alec Young, equity strategist at Standard & Poor’s, and David Kelly, chief market strategist at JPMorgan Funds, discussed their market outlooks.
“We’re still cautiously optimistic that we’ve seen the lows,” Young told CNBC.
“We hit 1,040 on an intraday basis on May 25. There’s great technical support there; we still see a gradual improvement in the U.S. news flow.”
Young said he is encouraged by the strong earnings numbers and expects a similar trend in the second quarter.
“However, until we get some real improvement in these international headwinds, the most you can hope for is a choppy sideways market,” he said. “It’s way too early to call for a move back up to the 1,200 area and at this point, we’d be happy to see the markets hold last week’s lows.”
In the meantime, Kelly said stocks look “cheap” compared to other investment alternatives such as Treasurys or cash.
“Markets climb a wall of worry...we are seeing a strong ratchet up in earnings,” he said. “I expect negative headlines, but that doesn’t mean markets won’t move up.”
Scorecard — What They Said:
- Young's Previous Appearance on CNBC (May 27, 2010)
- Kelly's Previous Appearanceon CNBC (May 26, 2010)
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- Markets In for 'Messy' Summer—Then Strong Rally
- Position for a Recovery: 4-Star Fund Manager
- Double-Dip or Recovery? What the Pros Say
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No immediate information was available for Kelly or Young.