Economy on the mend, but profit drivers look weak: Strategist

Greece has been 'scared straight': David Bianco
Greece has been 'scared straight': David Bianco   

Deutsche Bank's David Bianco reiterated his bearish near-term market forecast Wednesday, saying a number of economic indicators are on the mend, but the forces that drive profit don't look as healthy.

The bank's chief U.S. equity strategist sees the S&P 500 slipping below 2,000 this summer. The index ended Tuesday up 5 points to 2,063, nearly 68 points off its record closing high.

"When we look at the drivers of profit, we actually still see a lot of weakness. The commodity complex has a long road ahead before it recovers," he told CNBC's "Squawk Box." "The situation in industrials and industrial manufacturing is actually very weak." The S&P industrials sector is down about 3.6 percent year to date.

Bianco said the United States has been mired in an industrial recession throughout the last six months due to the strength of the dollar, the collapse in oil prices, and the slowdown in the global economy and investment spending in emerging markets.

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With the exception of the automotive industry, manufacturing has been "extremely weak," Bianco said. He projected that Wednesday's ISM Manufacturing survey would come in above 50, a level that indicates growth, but only on the strength of the auto sector.

"It's being buoyed above 50 just because of good growth in auto, but if you look at most industrial companies, they're top line is not growing and I think that persists," he said.

With that in mind, Bianco said he would sell into Wednesday's early morning rally in Europe, which followed a Financial Times report that Greek Prime Minister Alexis Tsipras would accept creditors' bailout terms he previously rejected, steering the country away from a path that could see it leave the euro zone.

Greece entered arrears after missing a 1.6 billion euro ($1.8 billion) payment to the International Monetary Fund due Tuesday.

Read MoreGreek crisis: Markets up on report of Tspiras climbdown

Doug Cote, chief market strategist at Voya Investment Management, disagreed, saying it was "crazy" to sell.

He said fundamentals are positive across the board, noting particular strength in housing and the health of the consumer. Further, he pointed out that energy prices are roughly 30 percent lower and said that every 10 percent drop in those prices adds 0.2 percent to global GDP.

"That's just starting to be seen. That's starting to work it's way through," he told "Squawk Box." "I'm seeing the consumer, not just in the U.S. but globally, is in a virtuous cycle from here."

The market is looking to fundamentals and past the situation in Greece, he said. The S&P 500 and the Dow Jones industrial average fell about 2 percent on Monday as Greece and its European creditors failed to reach an agreement on a new bailout package for the indebted Mediterranean country.

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