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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.

“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

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