Strong third-quarter earnings could be a "positive catalyst" on a U.S. stock market that has been plagued by uncertainty, Eugene Peroni, Advisor Asset Management senior vice president, told CNBC Thursday.
Interest rates are low and earnings in several sectors are expected to come in better than expected, the asset manager said, adding, "if we can peel off some of these uncertainties that the market has been grappling with for weeks, if not months, ahead of the earnings season, there’s a chance the earnings can be a positive catalyst."
Keith McCullough, CEO at Hedgeye Risk Management and a CNBC contributor, said in the same interview that "hope is not an investment process."
With JPMorgan Chase and other financial companies reporting in mid-October, "I think the front end of earnings season will be a dramatic downside surprise," McCullough said. "Net interest margins are coming in hot, these European risks are real and the currency markets are breaking down with a strong dollar. That makes us long the dollar and not long anything else."
Besides the PowerShares DB US Dollar Index Bullish Fund , McCullough said he has a couple of long positions in several companies—he named Starbucks and Target —he said would do well if the dollar strengthens, and crude oil and commodity prices come down.
Peroni countered that "financials have been weak for some time, so I don't think it will be a great surprise if earnings come in below expectations."
Instead, he'd look at earnings in the technology, health care, energy, and agriculture sectors for "more guidance as far as the overall growth potential." Peroni's picks include Alexion Pharmaceuticals , Herbalife, and Precision Castparts .
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Disclosure information was not available for Keith McCullough, Eugene Peroni or their companies.