Stocks fell on Tuesday after a report showed wholesale inflation rose more than expected in November. How should investors approach the markets today? David Sowerby, chief market analyst and portfolio manager at Loomis Sayles, and Ted Parrish, co-portfolio manager at Henssler Equity Fund, shared their outlooks.
The markets are "simply pausing,” Parrish told CNBC.
“For the most part the [economic data] is positive and I think that it will continue that path until the new year. We don’t expect a whole lot more for the remainder of this year, but for the next 2 to 3 years, we will chase up to new all-time highs.”
Parrish said while consumers are not totally healthy, businesses are in a good place—in terms of debt and cash levels on their books—to have a lot of ability to grow.
“And if you look at the M&A activity in the market, that suggests that there are a lot of cheap stocks out there,” he added.
Sowerby said there is a chance for stocks to rise 15 percent in 2010.
“The probability of that number after a low 20 percent return in 2009 is quite robust, when I balance that with favorable cash flow yields for the average stock that you’re able to invest in today,” Sowerby said.
Parrish's Stock Picks:
McGraw Hill
Tiffany’s
Honda Motor
Boeing
Northrup Grumman
Sowerby’s Sector and Stock Picks:
Technology
Industrials
Pockets of Consumer
Utilities—on a "very stock-specific basis"
Northrup Grumman
Oracle
Michael Baker
J&J Snack Foods
More Market Intelligence:
- Cramer: 10 Stocks to Buy Your Kids in 2010
- US 'Still an Attractive Place' to Invest: Stock Picker
- 2 Good Deals on Bank Stocks Now: Analyst
CNBC Data Pages:
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Disclosures:
Parrish owns MHP, HMC, BA, NOC, PEP via owning shares of Henssler Equity Fund.
Sowerby owns ORCL, BKR, JJSF via owning shares of Loomis Mutual Funds.
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