Markets Have 'Tremendous Amount of Valuation Risk' Now

Stocks wobbled following a mixed bag of economic data Friday. What should investors expect going forward? Christopher Zook, chairman and chief investment officer of CAZ Investments, shared his outlook.

Market Edge
Market Edge   

“There’s a tremendous amount of valuation risk right now,” Zook told CNBC.

“Stocks are not expensive, but stocks have been pricing in a normal recovery."

"But this recovery’s going to be anything but normal,” he added.

Zook believes that while deflation seems to be approaching, inflation expectations are also starting to build.

“Whether or not we see prices decline in some categories, the real consumer is experiencing inflation,” he explained. “So we do expect that as the velocity of money does pick up on the other side of deflation, that interest rates are going to go up a lot—long-term, they go up significantly from here.”

Scorecard—What He Said:

  • Zook's Previous Appearance on CNBC (Feb. 12, 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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Friday's Top Dow Gainers (as of this writing):

Hewlett-Packard

Bank of America

Boeing

Chevron

McDonald's

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Disclosures:

No immediate information was available for Zook or his firm.

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Disclaimer