Pros Say: Markets to 'Tumble to Earth' in Next 2 Months

Stocks continued to rise on Tuesday after an encouraging report on home prices and an unexpected jump in consumer confidence. The Treasury auctioned off $42 billion in 2-year notes today, and it was met with mediocre demand. Additionally, President Obama officially reappointed Ben Bernanke for another term as Federal Reserve chairman. Bernanke's next challenge will be presiding over the recovery, economists said. Watch and listen to what the pros had to say...

Equities a Good Opportunity Until Year-End

David Costa, dean at Robert Kennedy College, sees good opportunities in equities until the end of the year. “One interesting opportunity is in luxury goods,” he said. “That’s one of the few markets, where to build a brand, you need a century, not a few years…Outside the United States, some luxury goods producers have reported some interesting results.”

Markets to 'Tumble to Earth on Bad News'

"Good news" is what’s fueling the market rally, said Alan Capper from Pinner Park Investments. "I always get worried when a market behaves like that because that doesn't suggest that it has its own momentum—it needs that fix," he said. He sees the market "tumbling to earth on some bad news" sometime in September or October.

US to be Hit by Foreclosure ‘Tsunami’

A “tsunami of home foreclosures”is set to hit the U.S. as banks are unable to keep bailing out tenants that can’t afford their rent, said David Karsbol from Saxo Bank. “A lot of homes have been held back because if the banks are foreclosing on them, they will have to do a writedown on the mortgages they have on their balance [sheets],” he said.


Recovery Shaky Unless Consumer Returns

"Unless the American consumer gets back on its feet, or you see new sources of consumption coming through from the emerging world, there is actually nothing to sustain a recovery and you could get a dip once the inventory cycle turns," said Linda Yueh from Oxford University. “Whether or not there’d be more bank losses is associated with whether or not we have another dip." She said bank losses now are not only driven by toxic assets, but traditional assets such as credit cards, commercial property, consumer lending, which all become vulnerable.

Natural Gas Prices to Triple by Winter

“If you look at the long-term relationship between [gas and oil], normally they trade fairly closely together…This is the first time we’ve had such a wide divergence in the gas market,” said Peter Hutton from NCP/European Securities Network. He expects gas prices to triple by winter.

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