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A trade war would be painful for markets, but long-time bull Jeff Saut isn't heading into the bear camp

If President Donald Trump's tariffs go into effect, one of Wall Street's long-time bulls suggests stocks will get hammered.

Raymond James' Jeffrey Saut says the safest place for investors is on the sidelines until there's more clarity.

"If this spills over into a full-blown trading war, then I have no idea where the bottom is going to be in this," the firm's chief investment strategist said Friday on CNBC's "Trading Nation." "I'm just kind of sitting on my hands right here until the dust clears."

On Thursday, Trump announced the United States will institute tariffs on steel and aluminum as early as next week. The news sparked a deep stock sell-off. For the week ending Friday, the Dow fell 3 percent and the S&P 500 dropped 2 percent.

"We'll have to see what happens in the next couple of weeks because I think it's going to take that long to sort it out," he added. "If you're going to see a retaliatory move, you're going to see it in the next couple of weeks."

The move would anger the global community and potentially create shock waves through the market, according to Saut.

But Saut, who acknowledges the tariff announcement surprised him, isn't abandoning his secular bull market view.

He contends the strength of economic and earnings growth could keep stocks fundamentally sound for as long as a decade. Saut also cites under-investment as a long-term bullish signal.

"I do think it's noise in the short run. I think it's going to present a buying opportunity in the long run," he said.

In the meantime, Saut isn't willing to recommend buying stocks. He says it's not unreasonable for the stock market to retest the February correction lows.

"I am not going to step in here and buy a falling knife," Saut said.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Sara Eisen

Sara Eisen joined CNBC in December 2013 as a correspondent, focusing on the global consumer. She is co-anchor of the 10AM ET hour of CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET), broadcast from Post 9 at the New York Stock Exchange.

In March 2018, Eisen was named co-anchor of CNBC's "Power Lunch" (M-F, 1PM-3PM ET), which broadcasts from CNBC Global Headquarters in Englewood Cliffs, N.J.

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