Look to Europe, not 'fully valued' US: Expert

U.S. markets seem "fully valued" and better opportunities exist in other pockets of the globe, one market watcher said Thursday.

U.S. stocks were trading more than 1 percent higher Thursday as the S&P 500 traded above its record close. Perceived overvaluation in stocks make Europe and Japan more appealing, said Jeff Hussey, global chief investment officer at Russell Investments.

"There's a variety of metrics out there that make the market look fully valued if not rich. So we've been neutral U.S. equities since December and have been favoring Europe and Japan as some alternative areas for better return prospects," he said in a CNBC "Power Lunch" interview.

Traders work on the floor of the New York Stock Exchange.
Lucas Jackson | Reuters
Traders work on the floor of the New York Stock Exchange.

The German DAX has fallen more than 5 percent in the last month, while the Japanese Nikkei is down 2 percent in that span. Hussey believes they have more upside than major American indices.

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He added that he would be "happy" to see a 5 percent pullback in U.S. stocks.

U.S. equities may not have reached their peak, Tony Roth, chief investment officer at Wilmington Trust, said Thursday. Stocks could still move higher as it could take months for the Federal Reserve to abandon its near-zero interest rate policy.

Roth said he does not see a market correction approaching in the near future, he told "Power Lunch."

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