Citigroup's top market watcher isn't letting geopolitical jitters rattle his stock market forecast.
In an interview on CNBC's "Futures Now," Tobias Levkovich said it's too premature to make investment decisions on whether a trade war will erupt over Trump tariffs, or if Italy's political crisis will spark a contagion.
"That's kind of geopolitical risks akin to what if there's a war with Iran. So, we don't predict those. If they occur, we have to react and we have to hedge portfolios," the firm's chief U.S. equity strategist said Thursday.
His thoughts came as stocks tried to battle back into positive territory for the week. The Dow ultimately ended Friday securely in the green, gaining 219 points to close at 24,635. But it wasn't enough to give the Dow a winning week.
The S&P 500 fared better. The index gained more than 1 percent to close around 2734, and saw its second positive week in a row.
But by all accounts, Levkovich's stock market forecast isn't the rosiest. He's predicting a choppy year.
"We're actually trying to take advantage of some of the slowdown or the pullback," he said.
"We still think bond yields are heading higher. Wage inflation is coming," said Levkovich. "By the next six months, we should see higher yields which then benefit financials."
Levkovich's S&P 500 year-end target is 2800, but his 2019 mid-year forecast isn't much higher.
"If you look at a 12 month time horizon, you'll probably get up to the high 2800s," he said. "You're still talking about 7 or 8 percent total market return in terms of appreciation."
Levkovich acknowledged his forecast may be disappointing to investors who want a record-breaking, double-digit performance like last year, adding "We're all greedy."