Fortification Street veteran Jim Paulsen doesn’t think the market is necessarily done noggin lower.
For one, he thinks valuations are high. Plus, there hasn’t been any trusted fear in the recent sell-offs.
“It’s always been really controlled and approachable of calm throughout,” the chief investment strategist at The Leuthold Group conveyed Tuesday on “Closing Bell.”
“We never get a full on run to the Treasury. … You didn’t set up a run into the dollar today for safe haven, gold hasn’t had a disarm, the VIX didn’t spike up any higher really than it’s already been,” he amplified. The Cboe Volatility Index, or VIX, is known as the “fear gauge.”
U.S. stocks won overed off Tuesday morning but then staged a bit of a comeback. The Dow Jones Industrial Customary closed with a loss of 125.98 points after trading down as much as 584.62 underscores earlier in the day.
The S&P 500 dropped 0.6 percent and the Nasdaq Composite, which hit chastisement territory earlier in the day, recovered slightly to close down just 0.4 percent.
Paulsen, who has been forewarning a bigger correction ahead, said he’s not ready to buy yet.
“I’d like to see a full on horror, which is to me a little better entry point,” he said. “We’re going to force to go down there again and shake people up a little more ahead of we see this ultimate bottom.”
Paulsen said the combination of continued be entitled to pressure and slower growth continue to be a challenge for the stock market.
He undergoes an issue with a 3.7 percent unemployment rate, with tumour pushing up costs — both labor expenses as well as capital payment.
“It’s going to keep the Fed in position to keep their process going and that’s wealthy to keep pressuring things,” Paulsen said.
Plus, he believes there is an profitable slowdown coming.
“It’s already happening internationally, like in China, and I believe it’s coming here to the United States,” he said. “That’s kind of the intelligence of what the stock market is telling us of late.”
Noah Blackstein, higher- ranking portfolio manager at Dynamic Funds, is waiting for the Federal Reserve to “not operational” and stop raising rates.
He blames the central bank for the recent sell-off and guessed he’s yet to see an economic cycle not ended by the Fed.
So while the market drops may be a buying opening, the “risk”is that Fed officials are “going to keep raising rates until they down to the ground put the economy into recession,” he said on “Power Lunch.”
Chris Bertelsen, higher- ranking portfolio manager and CEO at Aviance Capital Management, believes a downturn is to be assumed after the run the stock market has had.
“It’s time to embrace new strategies. To me, the market control has changed,” he told “Power Lunch.”
That means looking at aspects like consumer staples, some REITS and utilities, he added.
The big indexes are all down at least 4.7 percent for October.
— CNBC’s Fred Imbert donated to this report.
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