Beal said as consumers further delever, the markets are going to continue trading sideways.
“I think it’s more like a square-root-sign recovery,” he said.
In the meantime, Waddell said the stock market seems to be consolidating its gains and trending sideways on low volume—a pattern that's "fine" in his view.
Waddell said the biggest story in 2010 will be the "resumption of animal spirits" in the real economy.
“This year, we’ve seen the animal spirits return to the capital markets, but given the trauma we went through in 2008 and the fact that it takes a while for these government programs to kick in, next year I think we’ll see a peak in unemployment rate, the Fed move off of 0 percent [interest rate], the dollar [will] strengthen, and we go into mid-term elections and so some of the hyperactive legislative activity starts to stem,” he said.
Waddell added that although the economy is currently like a "patient on crutches," the crutches will eventually go away—“but that’s a 2011 story, not a 2010 one,” he said.
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No immediate information was available for Beal or Waddell.