CNBC Stock Blog

Stick with Equities—They'll Pay Off: Strategists

Markets opened lower on Thursday after a surprise jump in jobless claims, a disappointing signal ahead of Friday's jobs report. How is unemployment affecting the markets? Kelly Campbell, founder, principal and chief executive of Campbell Wealth Management and David Kelly, chief market strategist at JPMorgan Funds, shared their insights.

Market Edge

“This economy will produce jobs, but it’s just taking its sweet time doing it, and that’s making a lot of people nervous,” Kelly told CNBC.

Kelly said although economic signals are mixed, investors should stay overweight on equities.

“You can see a situation in the next 3 to 5 months where you have payroll jobs gains, retail sales gains, housing starts going up. These numbers could all begin to move in line together in the next few months and you have to be ahead of that,” he said.

However, Kelly said investors ought to be worried about the government bond markets.

“Interest rates on long-term government bonds are probably too low across the world,” he said. “A colossal amount of money is being poured into bonds because people don’t want to do stocks, but the truth is, the bond market is expensive, the stock market is cheap—at least for Treasury bonds.”

In the meantime, Campbell said there’s still a long way to go for stocks and that the momentum built into the market is still moving in the positive direction.

“The stock market at the end of the day is going to give the investor the best bang for his buck,” he said. “And if they are not in it, they are not going to be able to take advantage of it.”

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No immediate information was available for Campbell or Kelly.