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Top strategist calls market bottom

Chief investment strategist at BMO Capital Markets, Brian Belski, explains why there's no fundamental reason for the market's scary October performance.

Posted: Nov 1, 2018 12:23 PM
Updated: Nov 1, 2018 12:26 PM

After a scary October, the stock market could have a winning November.

The Dow rose 241 points Wednesday, or 1%. The Nasdaq jumped 2%, while the S&P 500 climbed 1%. The solid trading session follows a strong Tuesday in which the Dow soared 432 points.

The Nasdaq's gains Wednesday trimmed its monthly decline to 9.2% — still the index's worst month since November 2008. The S&P 500 ended the month down 6.8%, its steepest decline since September 2011.

Expect stocks to get back on track following this month's pullback, Brian Belski, chief investment strategist for BMO Capital Markets, said Wednesday on CNN's "Markets Now" live show.

Belski described the dip as "very normal and very healthy."

"We never like to see people lose money, but we needed to take some complacency out of the market," he said.

This stock market had an extremely volatile month. Big Tech stocks plunged as earnings growth slowed, interest rates rose and the threat of a longer China trade war intensified.

But concerns that corporate earnings would falter were overblown, according to Belski.

"Everyone was nervous about earnings for no good reason," he said.

Weak results from industrial companies such as 3M (MMM) and Caterpillar (CAT) did push down markets last week, but the index raced back by day's end.

"We think this is a bull market correction within a very large secular longer-term bull market," Belski said.

Now is the time to put money into American stocks, he continued. After the credit crisis, investors risk playing too much defense, he said.

"American companies are the strongest of the world, with the most consistent earnings growth," Belski said. "You need to be a buyer of American stocks, and we're here to stay."

"Markets Now" streams live from the New York Stock Exchange every Wednesday at 12:45 p.m. ET. Hosted by CNNMoney's business correspondents, the 15-minute program features incisive commentary from experts.

You can watch "Markets Now" at CNNMoney.com/MarketsNow from your desk or on your phone or tablet. If you can't catch the show live, check out highlights online and through the Markets Now newsletter, delivered to your inbox every afternoon.

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