US Markets

'Steamroller' to bull market not that far away, warns market analyst

Key Points
  • Positive market momentum should last as long as economic data remains strong, strategist Erik Ristuben says.
  • However, he says the market rally is late in the cycle.
  • Late-cycle investing is like picking up dollars in front of the steamroller, and it's a really good idea to keep an eye on the steamroller, he says.
Closing Bell Exchange: Taking profits in market rebound
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Closing Bell Exchange: Taking profits in market rebound

Positive market momentum should last as long as economic data remains strong, strategist Erik Ristuben told CNBC on Friday.

However, the market rally is late in the cycle, he pointed out.

"Late-cycle investing, as you know, is picking up dollars in front of the steamroller, and it's a really good idea to keep an eye on the steamroller — which we don't think is imminent but we think it's not that far away," the chief investment strategist at Russell Investments said in an interview with "Closing Bell."

Therefore, he thinks investors should consider diversifying their assets with such things as real-estate trusts and commodities.

Stocks have rebounded sharply from last week's correction. On Feb. 8, the major averages closed 10 percent below all-time highs set last month.

On Friday, equities closed higher, extending their winning streak to six days in a row. The had its best week since January 2013, while the Nasdaq had its best week since December 2011. The Dow Jones industrial average saw its biggest weekly gain since November 2016.

The major averages were still down for February.

Dow on pace for best weekly gain since November 2016
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Dow on pace for best weekly gain since November 2016

Peter Costa, president of Empire Executions, called the rapid market moves "very unusual."

"Normally when you see any kind of corrective action, it takes longer than a day and a half," he told "Closing Bell." "But this one took a day and a half to have that correction, get into corrective territory, and why wouldn't the rally be the same?"

He thinks it's possible that it may take only eight days since the correction to be back to record highs.

"This is a new dynamic. This is a new market," Costa said. Therefore, investors are probably going to have to get used to these type of fast moves up and down, he noted.

"The market dynamics and the market structure is set up so that when the markets slide there aren't those points where buyers step in because the computers are telling them not to," he said.

— CNBC's Fred Imbert contributed to this report.

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