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Power Play: Market returns in 2016

Traders work on the floor of the New York Stock Exchange.
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Traders work on the floor of the New York Stock Exchange.

The Dow and S&P 500 are now negative for the year following a slide in oil prices, but the market will likely rebound next year.

David Katz, chief investment officer at Matrix Asset Advisors, tells CNBC's "Power Lunch" on Tuesday, he sees higher returns. "2016 will be a better year and market will likely move back to the high single digit/low double digit return level," Katz said.

His favorite sectors are financials, industrials, select health care names, old technology and energy.

Read MoreI see oil bottom higher than I did before: Analyst

"The current driver to lower [oil] prices is Saudi Arabia producing full throttle and in many respects breaking OPEC's cartel. We believe this is temporary as oil prices at these levels is not sustainable for Saudi Arabia or the rest of OPEC," Katz said.

UBS U.S. Equity and Derivatives Strategy Executive Director Julian Emanuel believes stocks generally do better after the first interest rate hike.

For the S&P 500, "this could lead to a valuation overshoot to as high as 2,500 in 1H2016 although our 2016 year end price target is 2,275," Emanuel said.

Within sectors, Emanuel recommends tech and heath care next year.

Financials, industrials, technology and energy are lower during trading, while health care is higher.