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Europe Cyclical Risk: Citi Strategist

Europe Cyclical Risk: Citi Strategist

Certain S&P 500 names with exposure to Europe could be affected more severely, Citi Research Chief U.S. Equity Strategist Tobias Levkovich said Monday on CNBC.

"I think everybody's been focused on the sovereign credit issues in Europe," he said. "What's really happening in Europe is corporate credit continues to be very, very tight even as sovereigns have been able to borrow at a cheaper rate than they were a year ago, two years ago."

On "Fast Money," Levkovich said that in the United States, the Federal Reserve's lending survey continued expansion.

However, for companies with European exposure, he said that the story could be different.

"I would be much more concerned about the cyclical exposures here, so places that have about 20 percent or more of their sales into Europe from the U.S., places like the auto companies and their component suppliers, areas like chemicals within materials, capital goods within industrials," he said.

"Those are the ones that have very significant cyclical exposure, and corporations just cannot borrow cheaply."

Trader disclosure: On March 18, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Mike Murphy is long BAC; Mike Murphy is long C; Joe Terranova is long VRTS; Joe Terranova is long SJM; Joe Terranova is long MJN; Joe Terranova is long SCCO; Joe Terranova is long AAPL; Joe Terranova is long GS; Joe Terranova is long PANW; Joe Terranova is long VSI; Joe Terranova is long AXP; Joe Terranova is long GPS; Joe Terranova is long KORS; Joe Terranova is long SWN; Steve Weiss is long BAC; Steve Weiss is long C; Stephanie Link is long AAPL; Stephanie Link is long GS; Stephanie Link is long CSCO; Stephanie Link is long SBUX; Stephanie Link is long FB;

For Katy Huberty
Morgan Stanley & Co. International PLC and its affiliates have a significant financial interest in the debt securities of HPQ; As of February 28, 2013, Morgan Stanley beneficially owned 1% or more of a class of common equity securities of the following companies covered in Morgan Stanley Research AAPL.