Futures Now

The market's 'honeymoon' is almost over, this strategist says

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It's time for investors to take off their rose-colored glasses, strategist Mark Eibel says.

The director of client investment strategies at Russell Investments said Thursday that despite the overall bullishness since the election, troubling signs for the U.S. market will soon be seen.

"I think it's really the honeymoon period," Eibel said on CNBC's "Futures Now." "It's the hope that we can grow at a faster pace, [but] 3 percent on an ongoing basis is a pretty high hurdle from the 1.5 to 2 percent that we've experienced."

Eibel's comments follow promises by Donald Trump to grow the U.S. economy by 3 percent. But the strategist believes demographic changes, namely the slowdown in population growth and an overvalued U.S. market will actually keep the president-elect's plans in check.

The same factors lead Eibel to suggest that investors in U.S. stocks may want to "buy the dips [and] sell the rallies" in 2017.

"As we get into the governing of the next administration, it's probably a good opportunity to continue to trim the U.S., which is overvalued relative to the rest of the world," he said. It may be better to "take opportunities within a multi-asset framework to buy some other areas that I think have been probably beaten up." He predicts that the S&P 500 could fall back to 2,150 by the end of next year — about 100 points lower than now — but he does see opportunity elsewhere.

Eibel suggests looking into the emerging markets, which he believes are actually sitting at more reasonable valuations than the U.S. market and are boasting more sustainable growth. The emerging markets are currently up almost 13 percent year to date but have struggled to make new highs since the summer, especially after plunging postelection.

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