Stocks opened higher on Monday after a wave of merger-and-acquisition activity. Are the markets positioned to head higher or should investors remain cautious?
Market strategists Phil Orlando at Federated Investors and Stephen Wood at Russell Investments shared their insights. (See their sector plays, below.)
“The recession is over—we think it ended in the second quarter,” Orlando told CNBC.
“We think third- and fourth-quarter corporate earnings are going to be better than expected: modest topline gains, stronger than expected bottom-line…and as estimates continue to move up, we think the markets are going to grind higher and we’re going to be at 1,200 [on the S&P] in the next 3 to 6 months.”
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Wood said he is “guardedly optimistic” on the markets.
“What we’re looking at is a transition period where we’re transitioning from recession into growth, but the growth is going to be slow,” he said. “The consumer is not dead but damaged, I think corporate earnings recover a bit—but we’re not going to recover back to the 2006 levels any time soon.”
Orlando Likes:
Technology*
Materials
Financials
Consumer Staples—Food, Beverage and Tobacco
Health Care—Equipment and Services
Emerging Markets
Orlando Avoids:
Treasurys
Wood Likes:
Technology*
Consumer Discretionary
Financials
Wood is 'Underweight':
Health Care
Utilities
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Disclosure:
No immediate information was available for Orland or Wood.
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CNBC Slideshows:
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*Top Tech Companies:
Apple
Microsoft
IBM
Intel
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