Stock market to continue grinding higher: strategists
Stock market will rise with economy's expansion, although they may stumble when the Fed's quantitative easing ends.
Traders work on the floor of the New York Stock Exchange April 8, 2011. Two strategists see the stock market moving up as the economy continues to expand.
Brendan McDermid/Reuters
By JeeYeon Park, News associate
The stock market is going to continue to grind higher as the economy continues to show signs of expansion, said Larry Rosenthal, president of Financial Planning Services, and Timothy Harder, CIO of Peak Capital.
鈥淎nd with easy monetary policy and the extension of the Bush tax cuts again, it makes for a pretty good market from a bullish perspective, so we鈥檙e very positive right now,鈥� Rosenthal told CNBC.
However, Rosenthal warned that markets are likely to hit a stumbling block when the Fed stops the second round of quantitative easing (QE2). He noted that when the Fed pulled back on QE1 last summer, the S&P saw a 16 percent pullback.
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In addition, Rosenthal expects commodity prices to see a run-up in the short-term.
鈥淚n the face of a declining dollar and inflation pressures, people need to have money in their portfolios in commodities,鈥� he said.
In the meantime, Harder said oil prices remain a 鈥渂ig uncertainty鈥� going forward.
鈥淎void the previous high sectors,鈥� he advised investors. 鈥淵ou have to be broadly diversified鈥攜ou look at energy and materials as a percentage of the broader equity markets鈥on鈥檛 overexpose yourself.鈥�
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