Weak Housing and Autos Not Blocking Record Highs

Kim Caughey, senior equity analyst, Fort Pitt Capital Group, told CNBC’s “Morning Call” that the equity market is riding a strong economy to new highs.

“Basically, the economy is doing just fine,” Caughey said Friday. “We have full employment and that’s what causes consumers to spend -- not whether or not their house value is going up. We’re looking at the industrials leading the way in employment. Manufacturing jobs are among the best and industrials are doing very well right now.”

She said there are weak spots in the U.S. economy, including automotive and housing construction, but she likes infrastructure plays and looks three to five years out for investments.

Steven Lord, founder and chief investment strategist The Trend Investment Group, was more cautious.

“What we may be having here is a last gasp,” Lord said. “I don’t think the market is going to roll over and die. But I am concerned that the reasons people on the floor (of the New York Stock Exchange) give for buying are not secular trends. Earnings are decelerating and the economy is slowing. These are things that six months from now will make earnings comparisons a little bit more difficult. Remember, too, that we are meeting earnings expectations, (but) they’re dramatically reduced from three or four months ago.”

He said the market may continue to rise in the short-term, but asks a basic question: “Where do the next thousand or 1,500 points come from?”