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Markets May See a Late-Year Rally: Strategist

Thursday, 26 Aug 2010 | 11:06 AM ET

Stocks climbed higher Thursday after a report showed jobless claims fell last week. Does this mark an end to the pullback? Jeffrey Kleintop, chief market strategist at LPL Financial, and Bill Smead, chief executive and chief investment officer of Smead Capital Management, discussed their insights.

The Early Tick
Insight on the markets, with Bill Smead, Smead Capital Mgmt., and Jeffrey Kleintop, LPL Financial.

“I think we'll get some additional action from the Fed—[but] the earliest we’d seen that is September 21, because that’s the next FOMC meeting,” Kleintop told CNBC.

Kleintop said the markets may see an “October surprise” leading up to the mid-term election, and then more upside during the post-election session.

“All those could combine to create a classic, mid-term election late-year rally,” he said. “But until then, the bias may be lower and we’d be trimming equity exposure here, looking to add back exposure later this year.”

In the meantime, Smead advised investors to look for opportunities that can be held on to for the long run.

“We can’t predict the economy, but the most outstanding companies that have ever existed, with the strongest balance sheets, have proven over the last couple of years that they can handle this difficult economic environment,” he said.

Smead Likes:

Merck

Mylan

Kleintop Likes:

High-Yield Bonds

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Scorecard—What They Said:

  • Kleintop's Previous Appearance on CNBC (Aug. 2, 2010)
  • Smead's Previous Appearance on CNBC (Aug. 11, 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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CNBC's Companies in the News:

Dell

3Par

Hewlett-Packard

  • Dell Raises Bid for 3PAR, Trumping HP

Transocean

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Disclosures:

No immediate information was available for Kleintop or Smead.

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Disclaimer

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