The S&P 500 has fallen 10 percent since the start of the year and is flirting with two-year lows. But despite the sell-off, one Wall Street veteran says there are still pockets of value amid the carnage.
"I think it's going to be a stock picker's market as opposed to the markets driven by the central banks," the president of Yardeni Research, Ed Yardeni, told "Fast Money" traders Wednesday. "And for those of us who are investors, we might actually look forward to that."
Yardeni's S&P 500 year-end target is 2,000, or 10 percent higher than current levels. Spaces he thinks could drive that rally are housing, health care and consumer discretionary driven by strong employment numbers and consumer confidence.
"My investment strategy, really throughout the bull market, has been a "stay home" strategy as opposed to going global," said Yardeni. "I just felt like the global economy has got a lot of risks; it's gotten worse, not better."
Fed Chair Janet Yellen would agree.
During Wednesday's testimony on Capitol Hill, Yellen cited the global economic turmoil and recent sell-off in stocks as reason to delay in another round of hikes.
But Yardeni believes Yellen's approach will provide for a long, rocky relationship between hikes and stocks. Yellen explained that the Fed is not just data dependent but market dependent. And the likelihood of another hike will continue to fall if the market stays this turbulent.
"So they got themselves into a real trap here," said Yardeni. "Because if they start talking about the economy doing pretty well and the markets rally a little bit, and they start talking about raising rates again, they're going to get another tightening tantrum."