The S&P 500 is in for an 8 percent pullback by the end of the summer, Deutsche Bank's chief U.S. equity strategist said Thursday.
"We never get through a year without a 5 percent-plus dip in the S&P. I don't think this is going to be a year that avoids that," David Bianco told CNBC's "Squawk Box," noting there have been just three exceptions to the rule since 1960.
Deutsche Bank foresees the pullback coming this summer because it believes weakness in investment spending is not a transitory factor, particularly in the commodity complex and other types of globally related investment.
Energy and commodity companies have reduced capital expenditure spending as the cost of crude has roughly halved and amid broader weakness in commodities.
That draw down in investment spending will weigh on S&P 500 earnings, Bianco said, and more investors will come to terms with flat profits and negative revenues. He believes second quarter earnings will be even worse compared to last year.
China will also continue to decelerate, and any stimulus measures taken by the Chinese central bank will only serve to control that deceleration, rather than spur re-acceleration, he said.
Still, Deutsche Bank believes the Federal Reserve will raise its benchmark interest rate—which has been near zero since December 2008—leading to a stronger dollar and a limited commodity price rebound. The central bank has said its decision to raise rates will depend on economic data.
"I don't like what I see developing in the market. The past few weeks, the reflation trade is on," he said. "All of a sudden some investors believe the Fed's not going to hike, the dollar is going to weaken, commodity prices are going to rally, and they're positioning for this growth in inflation, not so much real growth, but inflationary pressures accelerating."
If the Fed doesn't hike rates, it would lead to further confusion about the direction of the dollar and long-term interest rates, he said.