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Wells Fargo 'political pinata' creates buying opportunity in banks: CIO

Financial stocks are cheap and are a buying opportunity, BMO Private Bank Chief Investment Officer Jack Ablin told CNBC on Wednesday.

Despite calling Wells Fargo a "political pinata" due to the sales practices scandal, Ablin said: "I am recommending financials in general. I would just say buy 'em all and it'll work its way out in the wash."

Ablin sees significant room for improvement in the overall market and hopes to see it move higher in coming months.

"The good news is analysts are expecting revenues to increase year over year this quarter. Hopefully we'll see earnings follow along, but it's a slow and steady process," he said on CNBC's "Squawk Box."

He's unsure, however, where revenue increases might come from.

"If inflation moves higher and interest rates lag, that could be the catalyst for a move higher," he said, though he was not suggesting the existence of a bubble.


Jeff Saut, chief investment strategist at Raymond James, predicted "sunny" third and fourth quarter year-over-year earnings comparisons due to a couple of key market shifts.

"I think the U.S. stock market is transitioning from an interest rate secular-driven bull market to an earnings-driven bull market. I think that's going to become quite apparent as you go over the next 12 months," he told "Squawk Box"on Wednesday.

While he said he does not see this as a cause for robust improvement across the board, corporate profits and the GDP will see marginal growth.

A big switch will also come from pension funds, which Saut said "are going to come to the realization with the low fixed income yields that the only way to get to their targets of 7 to 7.5 percent is through dividend-paying equities."

Saut predicted a flow of funds into equities over the next year.

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