Financial stocks could be headed higher next quarter along with the broader market, Argonaut Capital President David Gerstenhaber said Tuesday.
"I think that you have a fourth-quarter rally," he said. "You may have some indigestion this week but into fourth quarter stocks perform relatively well."
On CNBC's "Fast Money," Gerstenhaber noted that while there were short-term headwinds for the overall market, the trend was still higher.
"On a short-term basis, you've got problems with continuing resolution, the debt-ceiling issues. And we also have rebalance portfolios coming into the end of the month, where you may very well see selling of stocks and buying of bonds," he said.
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Gerstenhaber said that the Federal Reserve's decision to continue its $85 billion-per-month asset-purchase program remained a positive factor for stocks.
"So, I don't think it's all that surprising that the market's having a little bit of indigestion this week, but in terms of what's happening big-picture, the Fed is still highly accommodative," he said. "Wwe ought to anticipate that that's going to carry things higher.
"Now, that's self-limiting because unless we get earnings growth, or enough earnings growth, the market can't move that much higher. But I really don't see the risk of a significant setback to this environment."
For the financial sector, Gerstenhaber said that "the biggest problem" for stocks was that the economy doesn't grow fast enough, citing Citigroup's cuts in the face of a slowdown in the housing recovery.
But overall, he added, the climate was positive.