Expect markets to rally in the fourth quarter, said Uri Landesman, president of Platinum Partners, and Bob Phillips, senior partner at Spectrum Management Group. They discussed their insights and shared their best plays.
“You’re going to see the S&P drop over the next month below the 950 level and then we’re going to have a nice rally starting from the second week of October,” Landesman told CNBC. (Read a counterpoint: Short S&P When 1,030 Support Is Breached: Charts)
He said when the market sentiment is overly bearish, it generally signals an opportune time for investors to get in. So what will be the market catalyst going into the year-end?
“The economic data is going to continue to be sluggish, especially for the next month,” Landesman warned. “Rather, I think it’s going to be the third quarter earnings reports…that is going to highlight just how cheap this market is. It’s not just cheap on a P/E basis, but on a free cash flow basis.”
Phillips' View: 'Selective'
In the meantime, Phillips said a rally is expected as mid-term elections draw closer.
“There hasn’t been a negative 6-month period after mid-term elections since 1950, so pessimism is rampant at this point," he said. "You have to be selective with stocks, but it’s time to start looking at what to own and what to buy.”
Scorecard—What They Said:
- Landesman's Previous Appearance on CNBC (Jul. 26, 2010)
- Phillips' Previous Appearance on CNBC (Jul. 2, 2010)
Market Views—Across the Board:
- Art Cashin: Volume to Start Rising Next Week
- Selloff if Dow Breaks This Level: Pro
- A 'Very Good Time' for Bargain Hunting: Stock Picker
CNBC Data Pages:
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No immediate information was available for Landesman or Phillips.