Improving trends in the United States, as well as in Europe and Japan, will help drive earnings growth in the second half of 2015, Tobias Levkovich, chief U.S. equity strategist at Citigroup, said Monday.
Levkovich expects earnings growth to accelerate from about 2 percent in the first part of the year, to 8 percent over the course of the next six months.
"The highest correlation you'll find over time with equity markets is the earnings of those equity companies. If they are better, and they should be, we can get some improvement in markets," he told CNBC's "Squawk on the Street."
Throughout the balance of the year, he sees two trends taking hold. First, the drag from weak commodity prices and the strong dollar will not disappear but will moderate. Second, economic development will kick in, bolstered by labor market and wage growth.
Investors can finally expect to see the benefits of lower energy prices, not just domestically, but throughout the G7 economies, which follow exactly the same pattern, he said.
"There is about an 18-month lag between changes in energy prices and changes in economic activity," he said. "Everyone thinks it's immediate. You save money when you fill up your car at the pump and you go and quickly spend the money. That's not really what plays out."
As for whether a further strengthening of the greenback will prove a liability, Levkovich said a 10 percent move in the dollar could shave about 2 percent off earnings growth.
"It's not devastating," he said. "I think if you have 50 percent move in the dollar, then we probably have a lot to talk about."
Levkovich noted that Wall Street expected earnings to be down about 5 percent in the first quarter, but instead came in up about 1.5 percent. He expects the final read on second-quarter earnings growth will show a roughly 2 percent rise.