Alicia Levine believes Wall Street is making a big mistake.
The chief strategist at BNY Mellon contends it's still not accurately pricing in the growing possibility that U.S.-China trade talks will ultimately fail.
"The market got the wake-up call on May 5, and it hit the snooze button — expecting this to go away with a tweet," she said Thursday on CNBC's "Futures Now."
Levine is alluding to President Donald Trump's series of tweets on May 5 that threatened new tariffs.
"I think it gets worse before it gets better," she said. "The trade war is turning into a tech war, and this could go on longer. It could be deeper, and it could be harder to come up with a resolution."
"It was a dog. Nobody wanted to own health care, and the Democrats have been beating up on the health-care area because they want to introduce socialized medicine and single-payer," she said. "These multiples have gotten crushed."
Levine predicts the more popular defensive plays in this environment may soon face trouble.