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'Buckle up. This is going to be bumpy,' market expert says

  • With political drama finally weighing on the market, investors need to brace for more volatility ahead, David Schiegoleit told CNBC.
  • The market is already pricing in Trump's agenda, and an investigation may push that agenda back, Larry McDonald said.
  • Jack Ablin believes an overvalued market is looking for a catalyst to try to correct and "this is certainly as good as any."

With political drama finally weighing on the market, investors need to brace for more volatility ahead, David Schiegoleit of U.S. Bank Private Client Reserve told CNBC on Wednesday.

The Dow Jones industrial average closed about 370 points lower on Wednesday, while the S&P 500 dropped 1.8 percent. The Nasdaq composite also lagged, shedding 2.6 percent.

"If you are a long-term investor, buckle up. This is going to be bumpy. But fundamentals are still there," said Schiegoleit, who is the bank's managing director of investments.

The stock market has largely shrugged off recent events in Washington D.C., including the firing of FBI Director James Comey, who was investigating the ties between the Trump campaign and Russia. It also came to light this week that Trump allegedly revealed classified information to Russian officials during a White House visit.

However, news that Comey left a memo detailing a conversation in which Trump allegedly asked him to stop his investigation of Michael Flynn, the former national security advisor, has led to chatter about the possibility of impeachment. And that "I-word" is what rattled the market on Wednesday, Schiegoleit told "Power Lunch."

It doesn't necessarily have his clients asking to sell, though, he said.

"We haven't gotten that level of fear or panic yet," he said, noting that the next step is to see whether the Comey revelations are factual and if so, how the situation plays out.

The problem is there is a premium of as much as 4,000 points, or 20 percent, on the Dow Jones industrial average based on Trump's agenda of tax cuts, infrastructure spending, and deregulation, said Larry McDonald, managing director and head of global macro strategy at ACG Analytics.

"The Trump agenda has been almost fully priced in here to the market," he told "Power Lunch."

However, there may be only 75 to 85 legislative days left in the year, so "if we get bogged down in an investigation … that puts the entire agenda out until next year," said McDonald, also a CNBC contributor and editor of the Bear Traps Report.

On top of that, he said, there will not be a vote after March of next year, as Congress focuses on midterm elections.

"They're going to push everything out to 2019, so that's the problem. The entire growth agenda gets pushed out, and that's why there's an air pocket in the market," McDonald said.

For Jack Ablin, it's all about valuations. Both the S&P 500 and Nasdaq hit record highs this week before Wednesday's sell-off.

"When you look at stock valuations through the lens of earnings and revenues, we find that we're pretty far extended," the chief investment officer at BMO Private Bank told "Power Lunch."

"In many respects, an overvalued market is looking for a catalyst to try to correct, and this is certainly as good as any."

—CNBC's Patti Domm and Fred Imbert contributed to this report.