Wall Street letting fear overtake rational investing, market veteran Zachary Karabell says 

Zachary Karabell is concerned there's too much fear on Wall Street, based on one particular question from his clients.

"It’s ‘why aren’t the markets going down because there is so much negative news,'" the River Twice Capital president told CNBC's "Trading Nation" on Friday.

Karabell said it's the most disconcerting question he's getting, especially since it's often from professional financial advisors.

He saw it as a glaring signal that Wall Street is holding onto a "widespread assumption" that the markets should be doing worse, because of the uncertain political and geopolitical climates.

The latest jitters include President Donald Trump's rhetoric suggesting his trade war may evolve into a currency war.

"I’m sure many people obviously disagree, [but] that there is more fear in words rather than fear based on actions," Karabell said. "People are kind of undervaluing earnings. They are undervaluing fundamentals relative to that fear."

The Dow Jones Industrial Average and S&P 500 Index failed to end the week in the green, posting their first back-to-back losing streaks in a month.

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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.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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