Stocks were lower Thursday after the Fed highlighted the weakness of the recovery in its latest statement. Rob Morgan, chief investment strategist at Fulcrum Securities, and David Hefty, chief executive of Cornerstone Wealth Management, discussed their market outlooks.
“We’re going to trade sideways on stocks during the summer,” Morgan told CNBC.
“The wall of worry items are high and there are some good sectors out there to be had.”
Morgan said he likes the energy, materials and technology sectors.
“Even though I think we’re going to be sideways for a while, I think that longer-term, the underpinnings of the U.S. economy still look pretty good and we’re going to get through this European crisis as well,” he said.
In the meantime, Hefty said if the second quarter GDP reading is below 1 or 1.5 percent, then investors should move into cash and sit on the sidelines. (Correction: An earlier version of this story misidentified the quarter to which Hefty was referring).
“If they disappoint, it’s going to be a clear indication that the economy is not going to be able to bail out these banks and the banks will have to write down trillions of dollars of losses. And that will set us back into another major downward spiral and set us into a new cyclical bear market,” he said.
Scorecard—What They Said:
- Hefty's Previous Appearance on CNBC (May 24, 2010)
- Morgan's Previous Appearance on CNBC (June 15, 2010)
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No immediate information was available for Hefty or Morgan.
Correction: An earlier version of this story misidentified the quarter to which Hefty was referring.