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Historic rally could unwind due to trade and Brexit risks, market watcher Victoria Fernandez warns

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A dovish Fed won't insulate street from trade, Brexit risks: Market watcher

The Federal Reserve appears to be taking a more dovish approach to the markets, but Victoria Fernandez suggests it's not enough to keep the markets stabilized.

As long as geopolitical risks dominate the headlines, the chief market strategist at Crossmark Global Investments contends they'll exacerbate global slowdown fears which could undermine 2019's historic rally.

"We obviously have some uncertainties, right? And, the biggest two things on that list are going to be Brexit and the U.S.-China trade relations," Fernandez told CNBC's "Trading Nation " on Wednesday.

Despite her view that stocks are vulnerable to a pullback, she largely believes the U.S. economy is strong enough to withstand these obstacles — including one more Fed interest rate hike. However, it looks like another move higher is off the table this year. The central bank announced Wednesday that it plans to keep rates unchanged.

'Surprised that they went down to zero'

"I am surprised that they went down to zero on that. To me, that's more dovish than what we were expecting for the rest of the year," Fernandez said. "That could change. We know it's not written in stone. But that is a surprise to me."

Fernandez is responsible for $5 billion in assets under management, and her typical time horizon for clients is about 12 months for equities. Her asset allocation right now is 60 percent U.S. stocks and 40 percent Europe.

"On the equities side, we're finding places we can take advantage of movements in the market," Fernandez said. "As long as we have some tail winds to keep pushing us, that works to our advantage. If we have a big pullback, that's going to change our outlook a little bit," Fernandez said.

Since the December low, the has soared more than 20 percent.

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Not out of harm's way? Stocks vulnerable to potential trade, Brexit fallout: Market watcher