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Delay in Trump's agenda is the biggest risk to the market right now, portfolio manager says

  • If President Trump's domestic agenda gets delayed into next year, that's the biggest risk to the market right now, Mark Spellman said.
  • Cole Smead is concerned about the fact that much of the gains have been concentrated on the biggest names.
  • For Joe Zock, value stocks are the place to be.

The market may be reaching new highs, but there may be trouble ahead if President Donald Trump's agenda doesn't go as planned, portfolio manager Mark Spellman told CNBC on Monday.

Both the S&P 500 and Nasdaq composite closed at record highs on Monday after a rise in tech and oil prices.

While first-quarter earnings and cash flow were "very good," Spellman said, he was "amazed at how much we have just ignored the political and the background noise."

"If the Trump domestic agenda gets delayed into next year, that's what I think is the biggest risk to the market right now. If that were to happen, I think you'd have a problem," the co-portfolio manager at Alpine Funds said in an interview with "Closing Bell."

Cole Smead, portfolio manager at Smead Capital Management, is concerned about the fact that much of the gains have been concentrated on the biggest names.

"The biggest names in the market right now have the highest prices, and that's a big problem for the market. It's getting narrow. … That's just to the detriment of the passive investor," he told "Closing Bell."

That's because stocks don't go up in a straight line, and there is the unanswered question of what is the market's next act, he explained.

In this environment, he likes Lennar and Wells Fargo.

Spellman, meanwhile, said he would be a buyer of companies that are raising their dividends at an exceptionally high rate, like Lowe's.

For Michael Block, chief strategist at Rhino Trading, value stocks are the place to be.

While growth has outperformed value, he's expecting a turnaround.

"It's rotation time. I think it's value's time to shine," he told "Closing Bell."

He'd look at cheap names in tech, as well as retail — especially with earnings reports from Target, TJX Companies and Wal-Mart still to come.

"I don't think they're just left for dead here. I don't think they're going away. There's some value there. Let's go find it," Block said.

Retail stocks have been hammered as big names like Macy's disappointed this earnings season.

—CNBC's Fred Imbert contributed to this report.

Disclosures: Alpine Funds owns shares of Lowe's.

Disclaimer

This story has been updated to reflect comments from Michael Block.