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'Equity Markets are Cheap': Investment Strategist

CNBC.com staff
Wednesday, 11 Aug 2010 | 4:01 PM ET

The US equity markets have been "underplayed," hurt by a negative psychology that isn't based on the fundamentals, Robert Weissenstein, chief investment officer at Credit Suisse Private Banking Americas, said on CNBC Wednesday.

"If earnings continue at the rate they’re going, and even if they come in lower than where expectations are, the equity markets are cheap," Weissenstein said.

"People have priced in a pretty awful outcome."

Weissenstein said the Federal Reserve's decisionto continue purchases of government securities, coupled with its grimmer outlook for the US economy, showed the Fed was being vigilant about preventing the economy from turning lower.

"They are much more focused about being careful about raising rates too soon, is really what it comes down to, and undoing all the work that’s been done for the last two years," Weissenstein said. "It’s a positive, it means there’s not going to be some knee-jerk reaction to short-term data."

The fact that corporations are selling debt in the corporate bond markets is also positive, Weissenstein said.

"It wasn’t that long ago GE* couldn’t raise money in the commercial paper market," he said. "We tend to lose sight of where we’ve come from and where we’re headed."

Weissenstein said investors should also look to emerging markets in Asia, as well as Brazil and Latin America, for value.

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Disclosures:

Disclosure information was not available for Weissenstein or his company.

* GE is the corporate parent of CNBC.

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