Citi's top market watcher sees the bull market significantly slowing this year

March's brutal start on Wall Street may not be an anomaly.

If Citi's forecast is right, it could replay several times this year, whether or not President Donald Trump's tariffs on steel and aluminum become a reality.

"We're looking for a more moderate year this year versus last year," Tobias Levkovich, the firm's chief U.S. equity strategist, said on Thursday's "Futures Now."

He doesn't see a powerful stock market comeback developing anytime soon — citing mounting inflation pressures as a major headwind to the bull market.

Rising prices have been high on his radar since autumn. That's when Levkovich began warning investors that the historic rally was in trouble due to wage growth trends.

Yet the markets didn't become spooked by the threat until Feb. 2, when monthly wage growth figures were released.

Due to the vulnerability, Levkovich came into 2018 with an S&P 500 Index year-end target of 2,800 — about a 5 to 6 percent gain. It's considered a conservative estimate based on forecasts from his Wall Street peers.

"Twenty-eight-hundred doesn't seem that exciting, particularly where we are right now," he added.

Levkovich also said rising raw material prices will further feed inflation.

"That will ultimately work its way through the economy through price increases. Companies want to do it. And in some cases, not every company, but in many cases, companies will be successful in putting through those price increases," he said.

Despite the growing inflation risks, Levkovich isn't avoiding stocks. He believes a strategy focusing on cyclicals and value stocks will give investors upside as market dynamics change.

"It tends to lead you to things like financials, energy, industrials and materials, and away from health care, technology, consumer staples, telecom and things like that," Levkovich said.

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