Market inflection point coming soon, trader says – CNBC

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Valuations continue to climb higher, and that has trader Peter Costa staying out of the stock market.

The president of Empire Executions has been shorting the market, and now he’s “almost thinking of doubling down.”

“You’ve had this move, and it’s been nonstop,” Costa told CNBC’s “Closing Bell” on Friday. “There’s going to be an inflection point, and I think it’s coming up fairly soon.”

U.S. equities closed mostly higher on Friday. The Nasdaq, which closed just below breakeven, posted its largest first-half gains since 2009.

Costa believes people aren’t paying attention to the “big morass of problems” in Washington, D.C., which he said will trickle down into the equity markets.

While Costa has been betting against the stock market this year, it has continued to climb. He admitted there may come a point where he’ll have to “throw in the towel,” like if he sees second-quarter earnings “getting better and better.”

“We’ll wait until … the end of the summer and see what happens there. By that time I’ll either be broke or I’ll … be right,” he said.

Meanwhile, Chris Cordaro, chief investment officer at RegentAtlantic, believes “there is a lot of value out there.”

He likes financials, oils and energy infrastructure. He’s also a big fan of Apple, which, he notes, when you strip out the cash is selling at a 15 price-earnings ratio.

That’s a “tremendous bargain” for a brand that “can mint revenue,” Cordaro said.

For “Shark Tank” host Kevin O’Leary, holding positions internationally is a must.

“There are many, many good European companies trading at significant discounts to their equivalents in the S&P 500,” the chairman of O’Shares ETFs said in an interview with “Closing Bell.”

For instance, he owns Anheuser-Busch.

“I’m staying in Europe forever with 20 percent of the portfolio. I’m staying international with 20 percent because I’ve just looked and realized I can never guess over the last 40 years when to be in or out of those Asian or European markets,” O’Leary added.

Fred Lane, on the other hand, is sticking to domestic stocks. While he agrees that valuations are cheaper overseas right now, he has a long-term orientation and is discouraged by Europe.

“When I look at Europe I see declining populations, I see very poor demographics, I see even higher level of entitlements than we have here in the United States [and] I think lower levels of productivity,” the managing partner at Lane Generational of Raymond James told “Closing Bell.”

Right now he thinks tech stocks are in for a pause but will rebound. He also thinks health-care stocks will come back strongly.

— CNBC’s Fred Imbert contributed to this report.

Disclosures: Cordaro’s firm owns Apple. CNBC owns the exclusive off-network cable rights to “Shark Tank.”