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The resilient stock market may be lulling investors into a false sense of security, BlackRock warns

  • The tone of market internals indicates "a little bit more risk aversion," portfolio manager Russ Koesterich says.
  • The delivery of promised individual and corporate tax cuts could be a catalyst to the upside, the BlackRock strategist argues.
  • French presidential election voting Sunday is a near-term question hanging over stocks, he adds.

Measuring the mood of the stock market by looking at the overall postelection trend in the S&P 500 may be giving investors a distorted view of the level of bullishness on Wall Street, BlackRock's Russ Koesterich told CNBC on Friday.

"The tone of the market is indicating a little bit more risk aversion than is evident if you look at that headline number," he said on "Squawk Alley."

While the so-called Trump rally has certainly come off the boil in the past six weeks on policy uncertainty out of Washington and rising tensions with North Korea and Syria, the S&P 500 is still up 10 percent since early November.

"On the one hand the S&P 500 is not that far from its all-time high," said Koesterich, portfolio manager of BlackRock's $47 billion Global Allocation Fund.

"But if you look at market action over the last month, you've seen definitely a defensive bid: Rates are down, gold is up, more defensive parts of the market have been doing better, [and] value has been struggling a bit," he said.

The delivery of individual and corporate tax cuts promised by President Donald Trump and Republican leaders on Capitol Hill could be the catalyst to the upside that investors have been waiting for, Koesterich argued.

But a near-term question hanging over the market is this weekend's first-round voting in the French presidential election, he said.

Far-right leader Marine Le Pen, far-left firebrand Jean-Luc Melenchon, conservative Francois Fillon, and centrist Emmanuel Macron were all in the margin of error in the latest polls. If no candidate wins a majority on Sunday, which is highly likely, the top two finishers face a runoff on May 7.

"If we were to see a Le Pen administration, that would raise the risk ... of a French discussion about the EU," Koesterich said. Le Pen advocates leaving the European Union, like Britain is in the process of doing. "I don't think that's something the market would shake off," he added.

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