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Power Play: Market risks in Q4

Traders work on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters
Traders work on the floor of the New York Stock Exchange.

Stocks have rallied about three percent in October after ending September and Q3 on a negative note. But despite this recent surge, two veteran money managers tell CNBC's "Power Lunch" on Wednesday they are still concerned about market risks.

John Carey, EVP at Pioneer Investments and portfolio manager of the Morningstar 4-star rated Pioneer Equity Income Fund, does not believe the U.S. is immune to a global slowdown.

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"The overseas picture remains difficult, and export-oriented U.S. companies as well as U.S. companies with overseas operations may as a result continue to experience headwinds. We prefer companies that have a higher proportion of their businesses here at home, though those, too, will see pressures if the overall domestic economy slows because of softer exports," Carey said.

David Ellison, SVP and portfolio manager of the Morningstar 4-star rated Hennessy Large Cap Financial Fund, thinks uncertainty about Fed action in Q4 will be a problem for the market.

"The economy is good, so how much better can it get from here? Is [the] soft market since early summer presaging a slowdown?"