Market Pullback Coming in February: Citi's Levkovich

The market is up roughly 3 percent in January, but expect stocks to consolidate in February, warned Tobias Levkovich, chief U.S. equity strategist at Citi.

February: No Love for Stocks?   

“Some of our sentiment signals—the Shanghai market, which usually leads the market by 3 months, peaked in early November, so we think there are some challenges in February,” Levkovich told CNBC.

He expects the market pullback to be about 5 percent. But then he expects stocks to “grind higher” for the year, ending at about 1,400 on the S&P by year-end. (Scroll down for his industry group picks and pans.)

“Earnings are the primary driving force, but I’m very concerned about margins,” he said.

Levkovich’s Picks:

Diversified financials such as money-center banks and investment banks

Consumer services such as gaming and leisure products

Energy and capital goods

Levkovich’s Pans:

Retail

Materials

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Scorecard—What He Said:

  • Levkovich's Previous Appearance on CNBC (Dec. 29, 2010)

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More Market Intelligence:

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CNBC Data Pages:

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CNBC Slideshows:

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Major Earnings Coming Up:

Yahoo

Boeing

ConocoPhillips

AT&T

Caterpillar

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Disclosures:

No immediate information was available for Levkovich or his firm.

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Disclaimer