US Markets

Stocks will remain stuck on ‘rinse and repeat’ this summer: Brian Belski

Wobbly market eyes weak summer: Pro
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Wobbly market eyes weak summer: Pro

BMO Capital Markets still believes in a 15- to 20-year bull market, but the firm sees weakness and volatility prevailing this summer, Chief Investment Strategist Brian Belski said Tuesday.

Belski spoke one day after the VIX — a measure of volatility — topped 21, its highest level since February. Monday's session also saw investors pile into safe-haven sovereign bonds and dump stocks ahead of Tuesday's start of the Federal Reserve's two-day policy meeting and a referendum next week on Britain's European Union membership.

BMO correctly forecast the would pull back to about 1,800 — though the decline came ahead of its expectations. Belski said investors should expect stocks to keep knocking around between 1,800 and 2,100 in a "rinse and repeat" market.

"This summer, heading into the election, it's going to be bumpy," he told CNBC's "Squawk Box." "You have Brexit, you have Fed fears, you have commodity weakness we think, because ultimately, all we've seen in commodities has been a snapback rally. It's not been a fundamental rally."

In a note, BMO said it wouldn't rule out a sharp but healthy correction "to clean up some of the froth." Beyond this near-term trend, Belski said he believes the world will seek stability in U.S. stocks.

Michael Zinn, senior vice president of wealth management at UBS, said he also expects a "jumpy" market ahead of a "Sharknado of economic and political data that we have coming up."

However, he said, investors should take note of a decent U.S. picture underscored by improving earnings expectations, higher inflation and relatively good economic data. That puts the United States in a good position to withstand any potential shocks, he added.

Zinn said he is looking at the market opportunistically and hunting for companies that are selling at bigger discounts than previously available.

"As they say, you make all your money in lousy markets. You just don't know it at the time," he told "Squawk Box."

"Don't just run fully into the bunker," he said.

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