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Markets to Continue Grinding Higher: Strategists

The market is going to continue to grind higher as the economy continues to show signs of expansion, said Larry Rosenthal, president of Financial Planning Services, and Timothy Harder, CIO of Peak Capital.

“And with easy monetary policy and the extension of the Bush tax cuts again, it makes for a pretty good market from a bullish perspective, so we’re very positive right now,” Rosenthal told CNBC.

However, Rosenthal warned that markets are likely to hit a stumbling block when the Fed stops the second round of quantitative easing (QE2). He noted that when the Fed pulled back on QE1 last summer, the S&P saw a 16 percent pullback.

In addition, Rosenthal expects commodity prices to see a run-up in the short-term.

“In the face of a declining dollar and inflation pressures, people need to have money in their portfolios in commodities,” he said.

In the meantime, Harder said oil prices remain a “big uncertainty” going forward.

“Avoid the previous high sectors,” he advised investors. “You have to be broadly diversified—you look at energy and materials as a percentage of the broader equity markets…don’t overexpose yourself.”

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Scorecard—What They Said:

  • Harder's Previous Appearance on CNBC (Feb. 7, 2011)
  • Rosenthal's Previous Appearance on CNBC (Jan. 18, 2011)

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More Market Intelligence:

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CNBC Data Pages:

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CNBC Slideshows—FYI:

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Monday's Top Dow Gainers (as of this writing):

Merck

Chevron

Pfizer

AT&T

American Express

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Disclosures:

No immediate information was available for Harder or Rosenthal.

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Disclaimer