PNC Financial's Amanda Agati is informing investors the marketplace is successful a fragile spot connected the eve of net play due to the fact that of precocious valuations and superior risks associated with the Covid pandemic.
"I'm not needfully convinced that Q1 net play is truly going to beryllium each that wonderful," the firm's main concern serviceman told CNBC's "Trading Nation" connected Monday. "The marketplace has perfectly acceptable a precise precocious bar."
According to Refinitiv, the S&P 500 should person the strongest net maturation since 2018's 3rd quarter. It projects Q1 net maturation volition surge 24% from a twelvemonth earlier.
"We've seen a batch of those value-oriented stocks, a batch of the lower-quality names, rally beauteous hard successful anticipation of net season. While we deliberation the precocious barroom is apt to beryllium achievable, we're not truly convinced we're going to spot that outsized bushed complaint that we've seen implicit the past mates of quarters," Agati said. "That's truly what we request astatine these valuation levels to support this marketplace rally fueled."
Agati, who has $170 cardinal successful assets nether management, believes astir of the bully quality is priced into the market.
"We truly deliberation that Q1 net season, unfortunately, whitethorn beryllium a small spot much of a 'buy the rumor, merchantability the news' present until we tin get a truly meaningful and broad-based acceleration successful the underlying fundamentals," said Agati.
But she believes that volition beryllium problematic owed to the pandemic.
"Covid is precise overmuch successful the driver's spot adjacent with each the advancement that we've seen truthful acold this twelvemonth successful presumption of reopening and dilatory but steadier advancement astir vaccine organisation and deployment," Agati said. "The world is we are inactive facing beauteous important Covid waves across galore parts of the globe."
Agati besides highlights caller risks surrounding the semipermanent effectiveness of the coronavirus vaccines.
"We're starting to spot information coming retired of aesculapian journals present precocious that we whitethorn request to commencement reasoning astir a booster shot aft six months clip of being vaccinated," she added. "You deliberation astir erstwhile vaccinations started successful December. It's starting to travel backmost into the communicative close astir midyear."
Due to the unsettled backdrop and stretched valuations successful U.S. stocks, Agati is urging investors to look overseas for the astir upside.
"Without a doubt, we proceed to judge that emerging markets is the brightest prima successful the equity plus people universe," Agati said. "Emerging markets has the strongest net maturation backdrop not lone for this year, but besides successful 2022 arsenic well. ... They did not autumn anyplace adjacent arsenic acold arsenic the remainder of the developed satellite successful 2020."
CNBC's Robert Hum contributed to this report.