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Power Play: Don't forget about market risks

Traders work on the floor of the New York Stock Exchange.
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Traders work on the floor of the New York Stock Exchange.

Stocks are rallying on Tuesday, with the Dow moving out of correction levels. But Dave Donabedian, chief investment officer at Atlantic Trust, tells CNBC's "Power Lunch"on Tuesday, investors need to be aware of market risks.

At the top of his list is China and whether a slowdown there will have a boomerang effect on other global economies. A plummet in emerging market currencies could lead to a "global competitive FX devaluation," Donabedian said.

Read MoreChina shares lead losses in Asia on growth fears

John Canally, investment strategist and economist at LPL Financial, is also watching China.

"China's electricity usage up 2.1 percent between July and August, but is up just 1.6 percent from a year ago, well below the 4 percent year-over-year gain in 2014 and the 7 percent gain in 2013," Canally said.

Even though electricity consumption will become less significant as China transitions to a more service and consumer-oriented economy, Canally believes it is still the best gauge of China's health.

"Relatively free of political influence, China's energy consumption has been a decent proxy for China's manufacturing economy over the years," Canally said.

The Shanghai Composite ended lower on Tuesday, but the Dow, S&P 500 and Nasdaq are all higher during trading.