US Markets

This is a good sign for the economy and market, noted investor David Katz says

Key Points
  • Companies are feeling pretty good about the economy over the next six to 12 months, David Katz says
  • He thinks that should allow for a good year for the economy and stocks
  • Katz would buy financials on any pullback
Katz: Financials will do well over next 6-12 months

Earnings may be in line with the last few quarters so far, but it's what companies are saying about the future that's a good sign for the market, noted investor David Katz told CNBC on Wednesday.

"The outlooks that companies are giving are pretty good. The companies are feeling pretty good about the economy over the next six to 12 months," the chief investment officer at Matrix Asset Advisors said in an interview with "Power Lunch."

"It might not move the market this week but it should allow for a good year in terms of the economy and then the stock market."

That doesn't mean it will be a smooth ride. Katz believes there will be volatility ahead.

He's particularly bullish on financials and thinks any pullback is a buying opportunity. His favorites are JPMorgan and Wells Fargo. Morgan Stanley also has good upside, he said.

On Wednesday, Morgan Stanley reported a strong first quarter as its fixed income trading revenue doubled year over year.

Goldman Sachs, on the other hand, missed Wall Street estimates on Tuesday. Katz said while he isn't a shareholder, he doesn't think the company's model is broken.

He would also look for companies with great long-term outlooks that have already had pullbacks, like dividend players General Mills, UPS or AbbVie.

"You're getting a very good combination of current income, low volatility and upside."

Bruce McCain, chief investment strategist at Key Private Bank, also thinks there are opportunities to be found in this market.

While the market has been consolidating over the last few weeks, he still expects it to be higher over the next year.

"Whether you get an active sell-off to use as a buying opportunity or whether you simply have to take some positions in quality companies as you go, still we would get additional money invested as you have opportunities," he told "Power Lunch."

— CNBC's Fred Imbert contributed to this report.

Disclosure: Matrix clients and Katz own: JPM, WFC, MS, ABBV, GIS and UPS.