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Markets to Stay 'Very Volatile': Stock Picker

Stocks fell sharply on Friday after the monthly US emplyment report showed more jobs were lost in July than expected. Stuart Freeman, chief equity analyst at Wells Fargo Advisors, and Jeffrey Saut, chief investment strategist at Raymond James, discussed their insights.

“We could sell off,” Freeman told CNBC.

“We’ll probably continue to rally a little bit into August, but seasonality is going to play a bigger factor this year than last year.”

Freeman said investors should brace for more reports showing a slow economic recovery.

“We think the second half is going to be slower and GDP growth is going to slow,” he said. “We’ll still be trading around here at the end of the year, but it’s going to be very volatile.”

Saut: Watch This Factor

In the meantime, Saut said investors should watch the midterm elections going forward to determine where stocks will be trading.

“The midterm elections are going to be a referendum—If the progressives win and become emboldened, it’s going to put a headwind in the face of the economy as well as the equity markets,” he explained. “The quid pro quo is that if you get a more fiscal conservative backlash, I think markets can do well into year-end.”

Recommendations:

Freeman Likes:

Caterpillar

3M

FedEx

Saut Likes:

Wal-Mart

CVS Caremark

Microsoft

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Scorecard—What They Said:

  • Freeman's Previous Appearance on CNBC (Jul. 7, 2010)
  • Saut's Previous Appearance on CNBC (Jul. 19, 2010)

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Market Views—Across the Board:

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CNBC Data Pages:

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CNBC Slideshows:

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Disclosures:

No immediate information was available for Freeman or Saut.

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Disclaimer