The recent stock-market rally could be the one to break the back of bear market and bring a flood of fresh cash from investors afraid of missing more gains, market experts told CNBC Monday.
“This rally is changing the nature of what’s going on and will probably be the rally that breaks the back of the bear market,” James Barty, head of macro strategy from Arrowgrass Capital Partners, told CNBC.
The stock-market gains will be much more gradual in comparison to the sharp jumps seen in the second quarter of this year, according to Barty. But stocks can “grind higher from here,” and there are good opportunities in corporate bonds as well, he said.
The rally will not lead to a strong economic recovery, however, due to the “enormous number of headwinds that the economy is going to be recovering into,” Barty said.
- Watch the full interview with James Barty above.
But even though an economic recovery may be slower than many market watchers would hope for, the worst is now over, according to Stephen Pope, chief global market strategist from Cantor Fitzgerald Europe.
“There is a significant weight of economic data that’s coming through that is turning the corner, looking to the positive side,” Pope told CNBC.
Meanwhile, many fund managers will come under increasing pressure to show positive first-half results in the wake of a three very strong months for the major indexes. That pressure will likely lead to a wave of investment, as investors try to catch the tail-end of the rally.
“There will be a massive move of cash going back into the markets … you missed the first part of the rally, there is plenty more out there to have,” Pope said.
Barty sees more upside in emerging markets and financial stocks.
For the Investor: