Hope For a Rally Is (Slightly) Restored

NEW YORK ( TheStreet) -- Five things need to happen to facilitate and act as a catalyst for a market rally:

  • Successful Greek elections
  • Leaders in Europe take a more aggressive approach to the looming debt
  • Investors are positively surprised with the upcoming earnings season (AA just beat)
  • The Federal Reserve puts out a third round of quantitative easing, or QE3
  • Bonds start turning into equities
  • I am confident for more than emotional or hopeful reasons. Two of these catalysts have already happened -- the Greek elections were successfully held and leaders in Europe are becoming more proactive about their debt -- and many around the Street are saying that improving investor sentiment is on its way.

    The Fed should launch QE3 based on recent jobs reports. People as well as institutions are going to need more liquidity than bonds typically offer. Accordingly, I still believe a market rally is afoot.

    We know the saying, be fearful when others are greedy and greedy when others are fearful. I would like to add my own little tweak to it: Be rational when others are emotional, and emotional when others are rational.

    I see Europe not as something that has shrunk, but rather as something that will grow. As such, I am buying multi-nationals at what I believe will someday be viewed as an historic discount.

    The 10 multi-national names with exposure to Europe, which, if the rally materializes, I believe will pop are:

    Total ( TOT), Yum Brands ( YUM), McDonald's ( MCD), Owens Illinois ( OI), Advanced Micro Devices ( AMD) , Caterpillar ( CAT), Fluor ( FLR), Chevron ( CVX), Raytheon ( RTN) and J.B. Hunt Transport ( JBHT).

    Oliver Pursche is co-portfolio manager of GMG Defensive Beta Fund. At the time of publication there was no holding by the fund in the stocks mentioned.

    This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

    Oliver Pursche is President of Gary Goldberg Financial Services, a boutique money management firm located in Suffern, NY. Additionally, Mr. Pursche is the Co-Portfolio Manager for the GMG Defensive Beta Fund, and a Founding Partner of Montebello Partners, llc. In his role as President of GGFS, and as a member of the GGFS Investment Committee, Mr. Pursche helps oversee the investment portfolio of over 2000 clients with over $500 million dollars in assets. Mr. Pursche frequently provides market and economic commentary on CNBC and Fox Business News, as well as often being interviewed by The Financial Times, US News and World Report, Thomson Reuters, Bloomberg Businessweek, and the Associated Press regarding his and the firms views on the latest market news and events. Mr. Pursche's views on the market and investment strategies have been featured in the Wall Street Journal, Investors Business Daily, Smart Money, USA Today and other national business publications. In addition to writing for TheStreet.com, he is also a weekly contributor on Forbes.com and BankRate.com. His daily market commentary can be read at www.betafundcommentary.com or you can listen to him on www.financialtalkshow.com weekdays at 10:00 AM.