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Strategists "Very Cautious" Ahead Of Jobs Report

Occupy protesters make noise clanking pots in front of the main gate to Davos congress center on January 25, 2012 in Davos, Switzerland
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Where is the suddenly turbulent market going? The answer may be up for grabs, but one thing seems certain: all investors should factor in Friday's jobs report. Two strategists -- one equity, one bonds -- gave their views on "Power Lunch."

Phil Orlando, chief equity market strategist for Federated Investors, believes that the markets were oversold -- and that the correction is not over completely. As it "probably" needed a 10% correction to "rejigger it to reasonable levels" of valuation, he maintains we're only halfway there."

Thus, Orlando councels being "very cautious" ahead of the Labor Department's employment report; he told CNBC's Sue Herera that there could be an impact on the mortgage and housing markets if job growth slows significantly. He says non-farm payrolls "could come in light."

Trading & Jobs

Tony Crescenz, chief bond market strategist at Miller Tabak, concurs with Orlando's cautious outlook. He explained that last week's market plunge may turn out to signify two very different things: if it was a "financial event," i.e., a correction, then the bond market is merely overpriced; but if it was an "economic event" -- growing pains of an evolving economy -- then "major changes could be on the way."

Crescenzi advises that one way to prepare for massive change is to trade in to higher-quality bonds, rated triple-B or better.