Kleintop Gives 10 Reasons For A Rebound In The Markets

According

, Jeffrey Kleintop, chief market strategist at LPL Financial, believes that Europe’s sovereign debt crisis may be a silver lining in the US. Jeffrey said, “This is no different from what we saw in January, when we saw a 8 to 10 percent pullback—it’s fundamentally the same and we’re seeing some of the same technical patterns play out as well.” The strategist is of the view that the stocks will rise in about four to six weeks from now and will head back near April highs. Kleintop cited the current downturn as a good opportunity to take positions in commodities and US stocks. He recommended small-cap stocks as they and sectors like industrials and materials are bound to recover the fastest. “And focus on - oil’s having a tough time getting below $68 and there’s a good opportunity there along with the base metals,” he advised. Kleintop believes the markets will rebound and gives 10 reasons for it. · It is unlikely that Europe’s debt woes will worsen further. · The financial crisis of 2008 had different derivatives and leverage tied to it than those tied with sovereign debt. · Greece’s budget and debt problems are nothing but an aftershock of global financial crisis. · The Euro-zone has low expectations. · The US consumer will benefit from European problems. · The present economic conditions are favorable for growth. · The current stock market valuations are low as they are at a forward price-to-earnings ratio of about 13 times. · The growth in China is very well on track. · There may be several changes in the financial reform legislation to moderate it. · The Fed may decide to continue to keep rate at the current low levels. Read more