15% Correction Likely — But I'm Still Bullish: Strategist

Stocks fell sharply on Thursday after an unexpected spike in jobless claims and global jitters pushed the dollar higher. Alec Young, equity strategist at Standard & Poor’s, and Phil Dow, managing director at RBC Wealth Management, shared their market outlooks.

“We don’t think we’re near a bottom right now—this could trade down some more,” Dow told CNBC.

“We have yet to see a 10 percent correction and this may end up being something like that.”

But Dow said this is a good opportunity for investors to buy stocks on the dips.

In the meantime, Young warned that the markets could see a pullback of up to 15 percent.

“We haven’t even had a 10 percent correction in a year, so this is the first big one and I think it can easily overshoot,” he said. “There’s a lot of potential for contagion out there and you want to give your expectation a little bit of a downside cushion.”

Nevertheless, Young continues to remain bullish on the markets.

“Ultimately, it comes down to rates and earnings,” he said. “And what we’re seeing with these global threats—because we see U.S. exports to Europe are 5 percent of American GDP—we don’t see it as a big enough threat where it’s going to threaten the corporate profitability outlook in the U.S. for 2010.”

“And because of that, we see this more as a correction and not the beginning of another meltdown,” he said.

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Scorecard: What They Said Last Time:

  • Dow's Previous Appearance on CNBC (Apr. 5, 2010)
  • Young's Previous Appearance on CNBC (May 13, 2010)

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No immediate information was available for Dow or Young.