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This could spur market rally, says portfolio manager

We're in for a more difficult cycle: Pro

Stocks bounced around in choppy trading Wednesday as investors waited for earnings season to begin but one portfolio manager thinks there is the potential for a market rally on the horizon.

If earnings outside of certain industries related to energy and materials are OK, "despite some of the headwinds from the stronger dollar and weaker international economies, we might be in good shape for a rally from here given how weak the market has been in general during the year and given some of the valuations that we're seeing," John Carey, who manages the Morningstar four-star rated Pioneer Equity Income Fund, said Wednesday in an interview with CNBC's "Power Lunch."

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Earnings season unofficially kicks off Thursday when Alcoa reports after the close. Analysts expect overall earnings to fall more than 5 percent compared to the third quarter of last year, according to FactSet.

Dave Ellison, portfolio manager of the Morningstar four-star rated Hennessy Large Cap Financial Fund, said currencies, commodities and China are impacting the market and the outlook for corporations.

"I don't think we really fully understand how bad that's going to be or how they are going to mitigate that," he told "Power Lunch."

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While the hope is that it won't be as bad as many people think, Ellison noted that these types of challenges don't start and end in one quarter.

"I think we're in for a cycle that is going to be more difficult than we've seen in a while."

He's sticking with domestic financial companies like Wells Fargo, U.S. Bancorp and Fifth Third Bancorp.

Carey is also focused on names that have a greater emphasis on domestic operations, noting that he sees good business conditions in the U.S. Over the past year, he's been focusing on health care, financials, consumer and technology.

Recently, he's been finding opportunities in energy, utilities and industrials, but would wait for buying opportunities during earnings season, when he expects a lot of volatility.

Invest here for the rest of the year

Companies with U.S.-centric revenue streams are also a part of Alpine Funds portfolio manager Mark Spellman's fourth quarter playbook. With the U.S. consumer looking "pretty good," he specifically likes HSN. He also likes Kinder Morgan and Zimmer Biomet Holdings.

Meanwhile, Patrick Kaser, managing director and portfolio manager at Brandywine Global Investment Management, has his eye on BP, which he called a "fundamentally good story." He thinks oil is going higher over the next two to three years and believes BP, which a yield north of 7 percent, looks "very cheap." He also likes Citigroup and General Motors.

— CNBC's Alex Rosenberg and Jennet Chin contributed to this report.

Disclosures: Ellison owns Wells Fargo, US Bancorp and Fifth Third Bancorp via his ownership of the fund. Spellman's clients own HSN, Kinder Morgan and Zimmer Biomet Holdings through the fund. Kaser owns BP, GM and Citigroup, and his clients own the stocks through the fund.