Analyst Watch: Outlook for 2010 Remains Unchanged

U.S. stock index futures reversed earlier loses ahead of the open Friday after Dow components Bank of America and General Electricbeat estimates with their quarterly earnings.

Meanwhile, the government is due to release its June Consumer Price Index figures at 8:30 am New York time, with consensus forecasts calling for an unchanged reading following a May drop of 0.2 percent. The core rate, figured without the food and energy components, is expected to show an increase of 0.1 percent, matching the May figure.

Apple's news conference about the iPhone 4 is set for 1 pm. The Wall Street Journal is reporting that Apple will not announce a recall of the phone

BP shares surged in London trading after the company reported that it had stopped the Gulf of Mexico oil leakin a successful test of its new containment cap.

In other news, Goldman Sachs announced it would pay a record $550 million to settle SEC chargesrelated to subprime mortgage collateralized debt obligations.

Ray Harrison, Harrison Financial Group, says his outlook for 2010 has remained unchanged.

During his January 28th appearance on Squawk on the Street, he said the markets were “heading Sideways, but in a Hurry.”

To support that on January 28th the DJIA was at 10,240 and on July 15th the DJIA was 10,269 at 12:50pm—he sees no compelling reasoning that this is about to change suddenly.

The markets seem to be positioned into a sideways trading range, according to Harrison, on the S&P 500 between 1040 and 1140.

He thinks the individual investor does not TRUST this market for three key reasons:

  1. What is the real effect of tax increases coming next year?
  2. They are concerned about our debt and the deficits.
  3. They are looking for values and willing to wait until equities might go on sale in future.

Harrison's investment strategy is to play the market defensively, look at the cash or money markets as a very short-term position, keeping his ammunition dry.

The S&P 500 hasn’t solidly broke above its 50-day moving average—the S&P 500 resistance area seems to be around 1100. There could be a near term run up, but the longer term momentum trend looks to be a bit lower, Harrison concluded.

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