Expect V-Shape Recovery to 'Really Disappoint'

Stocks see-sawed lower for a third session on Wednesday. Is this the beginning of a pullback? Kim Caughey, vice-president and senior equity analyst at Fort Pitt Capital Group, and James Dailey, chief investment officer and senior portfolio manager at Team Asset Strategy Fund, discussed their insights.

“We can get out of here, but it’s going to take bigger news—maybe earnings,” Caughey told CNBC.

“Earnings are important, but what we’re interested in is the forward-looking estimates of the companies and what they’re seeing out there.”

Caughey said she favors companies that can grow on the topline such as Joy Global and Intel .

In the meantime, Dailey warned investors that although markets may be higher in the short-term, it could be a “head-fake high.”

“Ultimately, leading indicators are pointing lower into the back half of this year and likely into the beginning of 2011,” he said. “Earnings revisions are probably going to start heading lower.”

“This quarter might be okay, but there’s a global investor slowdown that’s poised to unfold in the second half. So we expect the V-shape that people were hoping for to really disappoint,” he continued.

Scorecard—What They Said:

  • Caughey's Previous Appearance on CNBC (May 27, 2010)
  • Dailey's Previous Appearance on CNBC (June 18, 2010)

More Stock Advice—Read and Decide:

CNBC Data Pages:

CNBC Slideshows:

  • Cramer's 12 Stocks to Play the Recovery


Wednesday's Dow Leaders (as of this writing):


Procter & Gamble





No immediate information was available for Caughey or Dailey.