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The odds of a 2017 recession are 15-20%, says economist

A 2017 recession is not outright impossible, but with consumer confidence, 10-year yields and earnings growth all steadily improving, it is unlikely, economist Anthony Chan said Monday.

Chan, who is a chief economist for Chase Private Client, said that October's University of Michigan consumer survey put consumer confidence five points above where it usually is before a recession.

More reductions in consumer confidence could increase chances of a recession, he said.

Chan added that going into 2017, he sees an inflection point approaching for what has been five consecutive quarters of negative earnings growth for the S&P 500.

"Moving into next year, I see that higher energy prices, stabilization in commodity process, will in fact start to raise earnings given that the energy sector is still a little over 7 percent of the market weight," Chan told CNBC's "Squawk on the Street."

Jeff Kleintop, chief global investment strategist at Charles Schwab, said that five quarters without positive earnings growth renders the market especially volatile.

"It's been two years since we've seen any earnings growth, valuations are slightly above average — I think we're more vulnerable than we've been in a while," Kleintop told "Squawk on the Street" on Monday.

Kleintop said that amid fears about earnings, it would be wise for investors to look beyond immediate, potentially lucrative but risky events like the election when setting up their portfolios.

"Elections are emotional, investing is emotional; we've got the combination here that can lead some investors to the propensity to make a mistake," Kleintop said, noting that concerns about the tightening presidential race could drive investors to "jump in" to the market too quickly.

As for next year, Kleintop said the financial sector could overcome some of the credibility issues it has been facing provided the Federal Reserve raises rates in December.

If the IMF is correct in predicting a jump in global inflation to 1.7 percent in 2017, Kleintop said, "you can expect higher … short and long-term rates. That could be better news for financials, overwhelming the issues with Deutsche [Bank], Wells [Fargo] and maybe some of the other specific issues in Italy."

Chan said the 10-year yield curve is picking up as well, which is a good sign for financials going into next year.

"It's not a scenario where the Federal Reserve is raising rates four times as they promised last year. That would've been a perfect scenario for the financials. But this is, nonetheless, a marginal improvement," the economist said.