Cashin: Expect defensive stocks to continue leading

Defensive stocks have led the market this year, and that trend is likely to continue, Art Cashin, director of floor operations for UBS at the New York Stock Exchange, said Thursday.

To be sure, stocks got a "big boost" after dovish comments on interest rates from Federal Reserve Chair Janet Yellen this week, he said.

"Up until then there was some uncertainty. The nonvoting regional presidents threw a monkey wrench into the market, and that had things a little screwy," Cashin told CNBC's "Squawk on the Street."

The presidents of the Federal Reserve banks of Philadelphia, San Francisco and Atlanta said this month that the central bank's policymaking committee should raise interest rates in April. That would be the second rate hike since the Fed's initial quarter-point increase from near zero in December.

But with earnings season kicking off next week, companies are set to suspend buybacks until after they report, Cashin said. Many believe those share repurchases have provided up to 70 percent of the support in the market, he added.

"I think you're going to see the market pretty much stay defensive here," he said.

The S&P 500 telecommunications sector, up more than 15 percent year to date, has led the market. Risk-off, dividend-yielding utilities and consumer staples stocks are up about 14 percent and 5 percent, respectively.

In keeping with the risk-off trend, U.S. Treasurys have outperformed the market this year. The iShares 20+ Year Treasury Bond ETF is up more than 7 percent this year, while the S&P 500 has risen slightly.

Jeff Rosenberg, chief investment strategist for fixed income at BlackRock, said Thursday that much of that return came from negative stock market sentiment around economic slowdown in China, persistently low oil prices and worries about the high-yield debt market.

"That resulted in a big risk off, and bonds benefit in that kind of environment," he told "Squawk on the Street."

Rosenberg cautioned against thinking about bonds as a short-term trade. Most investors should approach bonds from a portfolio context, he said, noting that it's still a low-rate world.

"The value of bonds is not really the yield or the income when we're talking about safe Treasury bonds. The value is ballast — that you have an offset to the risky stuff in your portfolio that you're allocating for income, for appreciation," he said.

Yellen's dovish comments and the prospect of the Fed dialing back the pace of interest rate hikes have created a short-term opportunity, but investors should be wary of taking on too much risk, Rosenberg said.

"We wouldn't get too ahead of ourselves on that view because a lot of the underlying imbalances — the excess capacity in the commodities sector, the vulnerability there that we see, the potential of bringing back the story around oil prices — is something we have to be cognizant of," he said.