Stocks wavered on Tuesday amid revenue weakness in the latest round of earnings reports. How should investors be positioned? Barry James, president of the James Advantage Funds, and Mark Eibel, director of client investment strategies at Russell Investments, discussed their outlooks.
“Every quarter, the hurdle gets higher—more has to come from revenue growth, and not as much from cost savings,” Eibel told CNBC.
“The reason why revenue is being the focus is that investors are looking for a reason to believe that things are getting better," he explained. "They’re not getting it from the macro as much, so they’re looking for any indication. So that’s why the bar is higher.”
Eibel added that the economic news "needs to get less negative” in order for stocks to advance.
“This could be a year where a lot of market action takes place at the end of the year,” he said.
In the meantime, James described the market as a “bouncing ball going down the steps” since the Flash Crash of May 6.
“Every low has been lower, and every high has been lower,” he said. “Investors are a little bit afraid and pulling back on some of the trading."
"But in the end, that will lead to a very good buying opportunity sometime in the second half of this year; but we’re just not there yet.”
Recommendations:
Eibel Likes:
Hewlett-Packard
JPMorgan Chase
Occidental Petroleum
James Likes:
Noble Corp
Sara Lee
James Market Neutral Fund
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Scorecard—What They Said:
- James' Previous CNBC Appearance (Jul. 9, 2010)
- Eibel's Previous CNBC Appearance (Jun. 23, 2010)
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Market Views—Across the Board:
- 10 'Buy'-Rated Stocks Without Buyers
- Stocks Are 'Extremely Cheap' Right Now: Strategist
- 5 Stocks with Biggest Earnings Upgrades
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CNBC Slideshows:
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CNBC Data Pages:
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Disclosures:
No immediate information was available for Eibel or James.
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