U.S. equity markets are "stuck" and in a "flat range", Goldman Sachs's Global Equities strategist Peter Oppenheimer told CNBC on Friday.
He explained that although there are signs that the economic conditions are improving a bit, earnings remain slow. The combination limits the potential for stocks to break out, he said. "But I would see continued volatility in rotation beneath the surface of the index."
U.S. stock markets closed higher on Thursday helped by earnings. The S&P 500 closed at its highest level since December on Thursday, helped by stronger than expected results from JPMorgan and the Dow Jones Industrial Average finished at its highest since July 20.
On Friday, the U.S. stock futures pointed to a slightly higher open ahead of more earnings results.
"Equities are not likely to break out on the upside. Some of the cyclical improvements are priced in. Things are not as bad as markets were pricing in January and there are areas of strength and I think the U.S. labor market is one of them," Oppenheimer added.
He further explained that the markets are entering a period of relatively low returns and that is true for all asset classes. "We are still in a relatively low if not zero interest rate world. Companies that can generate stable income are still very attractive," Oppenheimer said, adding that growth is very scarce and companies that can sustain low volatility growth are very much in demand.