This sell-off is the 'reality check' investors needed to keep the bull market going, top PNC strategist says

It's been a brutal October for the S&P 500 so far, with major benchmarks sinking into correction territory during a month of wild swings.

Yet the current sell-off is exactly what the market needed to get comfortable with slower, lower growth, said Jeffrey Mills, co-chief investment strategist and managing director at PNC Financial Services.

"I do think it's a bit of a reality check," Mills said on CNBC's "Futures Now" on Thursday. "We're moving from an environment where we were investing with a safety net and that safety net is being taken away. The central bank is slowly starting to increase interest rates so I think investors recalibrating to that reality probably makes a great deal of sense."

While Mills expected the bull market to grind on, there are some market forces that suggest stocks will not rebound immediately from this correction.

"We broke through the 200-day [moving average] pretty clearly, and we have had this defensive sector rotation which we really didn't see in January," Mills said, referring to the broader market. "So gold has rallied, staples are doing better...so for me I think we live here a little bit longer," he added.

A cowboy falls from a bull during 'Battle of the Beast' bull riding competition
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Gold has added 3 percent in October as the S&P 500 has plummeted nearly 9 percent. Defensive sectors like utilities and consumer staples are the only two S&P 500 groups either higher or flat this month.

Mills also stated the sell-off acts as a reminder that the U.S. economy cannot sustain this pace of growth forever. U.S. gross domestic product (GDP) rose by 3.5 percent in the third quarter, down from 4.2 percent growth from April to June. In an email to CNBC on Friday, Mills said the overall report was good, though capital expenditure and business investment disappointed him.

And violent swings in the market are also a test of confidence for investors spoiled by years of low volatility in this nine-year bull market, according to Mills.

"It's going to be a gut check," he said. "Being a buy-and-hold investor or buying the dip over the past eight or nine years, it's been relatively easy. The dips have been quick. They've been shallow but I think that's slowly starting to change."

Moves of more than 1 percent have become more common this year.

Since the beginning of January, the S&P 500 has closed with an increase or decrease of at least 1 percent in 43 sessions, including 10 days where it dropped by more than 2 percent. By comparison, the S&P 500 had just 8 sessions with a closing gain or loss of at least 1 percent in 2017.

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