Ron Insana, a CNBC and MSNBC contributor and the author of four books on Wall Street, predicts that while US markets are still volatile, American investors should “stay home and bet on the U.S.”
“While no one can predict whether the selloff is completely done, I believe we are much closer to the end of this down move than to the beginning,” he wrote on CNBC.com.
“The market is clearly oversold, high fliers are relative bargains, the number of new lows on the NYSE has contracted sharply from the depths of the selloff and overseas markets, especially Europe, appear to be stabilizing,” he said.
To be sure, the Dow Jones industrial average rose 34 points, or 0.2 percent, 16,526 as of 12:23 p.m. Wednesday. The Standard & Poor's 500 index climbed five points, or 0.2 percent, to 1,974.
“I expect the bull trend to resume into the end of the year, albeit in fits and starts, but I also believe the worst is now behind us,” he predicted.
“I still like the U.S. better than the rest of the world, although Europe broadly, Germany specifically, also offer value,” he said. “Stay home. Bet on the U.S.,” he advised.
Meanwhile, the Fed remains in focus before next week’s meeting, with odds favoring an increase in interest rates by the end of the year.
“Do not get spooked by the Fed. If it raises rates at all, it will be for mechanical reasons only,” he said.
Insana makes a strong case that the US economic fundamentals are strong, for now.
“The U.S. remains 70 percent consumption and 13 percent exports. We are increasingly energy self-sufficient,” he said. “Manufacturing is coming home. Technological innovation outpaces that of the rest of the world,” he said.
"U.S. demographics are far more favorable than in most other developed, and some developing countries, as family formations are beginning to accelerate again," he said.
"The world, our world in particular, looks more normal today than it has in several weeks."
But Newsmax Finance Insider Michael Carr offers contrasting evidence.
"One problem with the idea that the correction has ended is that nothing has been corrected," he wrote in his blog.
"Monetary and fiscal policies are still unsettled, just like they were a month ago. Federal Reserve officials still haven’t raised rates or even held a meeting and decided not to raise rates. Government officials haven’t passed a budget for next year or even held a meeting to share what they’re thinking about for a budget," he said.
"Looking at the news, there is no reason to expect stocks to reach new highs soon and there is no reason to believe the correction or bear market has ended."
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