
Tightening liquidity could end market gains: analyst
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Walter Gerasimowicz, founder and chief investment strategist, MEDITRON ASSET MANAGEMENT, told CNBC’s "Power Lunch" that a liquidity crunch could take the steam out of the current
market. "The biggest concern is going to be a liquidity constraint," Gerasimowicz said Thursday. "As long as we have liquidity in the marketplace, I believe we’ll continue to
see the advance. However, if credit begins to tighten, and if we see consumer spending being constrained, then we may see the markets retreating." Gerasimowicz said he likes healthcare,
defense and the environmental sectors, including companies engaged in water purification and delivery. Gina Sanchez, portfolio manager at the CALIFORNIA ENDOWMENT, said a stronger economy
could lead to higher interest rates. "The market has a lot of reasons to be nervous right now," Sanchez said. "One is that we had low jobless numbers. So, there’s a concern
that could follow on to wage increases. The chances of that are low. The real risk now is what’s happening in the credit markets and the follow-on effect to the subprime. That could squeeze
borrowing costs and make profits very hard (to earn) for companies." Sanchez said she likes the energy and technology sectors. From an asset class perspective, she likes large-cap
growth stocks.