Markets Can Test May Lows 'Later in Summer'

The Dow erased its gains after a higher open on Thursday as another rise in jobless claims weighed on the market. Maury Fertig, chief investment officer at Relative Value Partners, and Chip Cobb, senior vice president at Bryn Mawr Trust, discussed their outlooks.

“Unfortunately, we’re stuck in a trading range and I think we’re going to be here for a while,” Cobb told CNBC. “Primarily, there’s a lot of pressure that we’re dealing with and most of it is headline risk.”

Cobb warned investors that the Gulf oil spill and negative news from Europe may push the markets back to the May lows.

In the meantime, Fertig also cautioned investors about a short-term pullback.

“There’s a good chance that we’re going to test the May lows at sometime later in the summer, but if you look out into the year-end, I think we’ll be 5 to 10 percent higher,” he said. “Valuation in this market is extremely attractive based on earnings.”

“We will have concerns such as this uneven economic recovery and the news out of Europe, but I will use those as buying opportunities,” he said.

Cobb Favors:

Industrials: 3M , Caterpillar

Technology: Cisco

Telecom: AT&T

Fertig Favors:

Discounted closed-end funds: Legg Mason Capital & Income Royce Value Trust

Scorecard—What He Said:

  • Fertig's Previous Appearance on CNBC (Apr. 26, 2010)

Opposing Market Views:



CNBC Slideshows:

CNBC Data Pages:



No immediate information was available for Cobb or Fertig.