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Rising tide of markets 'doesn’t necessarily lift all boats': Bill Nichols

Markets are surging, with the S&P 500 posting a record high on Tuesday. But Cantor Fitzgerald's Bill Nichols cautioned that "within a rising tide, it doesn't necessarily lift all boats."

Nichols, head of Cantor Fitzgerald's U.S. equity trading, told CNBC's "Squawk on the Street" on Wednesday that investors must be nimble given that while the market may generally be trending upward, it has not shown uniform growth. Bank stocks have dipped recently, while other groups like industrials have risen.

However, more broadly Nichols characterized the current market as "in a pendulum," with stocks dropping significantly during the Brexit before rallying back up again. With the U.S. presidential election just months away and uncertainty surrounding the outcome, Nichols said utilities could be attractive on any type of pullback.

"The concerns are still there, you have to look at these big percentage moves," Nichols said. "With the election coming up, certainly a lot of question marks two to three months out."

As the markets rally, bond yields have dropped, with German and Japanese bonds even posting negative yields. BlackRock's Chief Investment Strategist for Fixed Income Jeff Rosenberg told "Squawk on the Street" that investors are facing a scarcity of safer assets, which presents opportunities in fixed income such as investment-grade corporate bonds.

The lower yields are a reminder for investors that bonds are most valuable for their "insurance policy" as providing ballast and diversification, Rosenberg said. Rosenberg added he does not see any signs of change soon.

"The sovereign debt markets are greatly influenced by the behavior of central banks," Rosenberg said. "[Central banks] are in no signs and no panic of trying to unwind any of this kind of distortion."