Wilmington Trust's Meghan Shue believes the coronavirus outbreak is a huge wildcard for Wall Street.
If the infectious disease keeps spreading, stocks are in trouble, she said.
"Coronavirus remains one of the biggest risks to the market at this point," the firm's head of investment strategy told CNBC's "Trading Nation" on Monday. "I don't think we know enough to know whether we're out of the woods as of yet."
Despite the fears, stocks kicked off the week in record territory for the S&P 500 and tech-heavy Nasdaq. The Dow rose 174 points, closing Monday's trading within a hair of its record high.
Shue, who has $113 billion in assets under management, expects elevated market volatility until number of coronavirus cases peak. Historically, she finds the market doesn't bottom until similar outbreaks reach a top.
"On the international front, we're watching coronavirus very carefully," she said. "The U.S. economy is certainly more insulated from the impact of any international slowdown — not necessarily the S&P 500, but the economy as a whole."
Shue sees two key things to consider: How much the virus spreads outside China and the impact on supply chains.
"From what we've been hearing, the larger technology companies [and] semiconductor companies have been able to manage this so far. But we're getting new information daily," said Shue, a CNBC contributor. "So, everything I'm saying is with a healthy dose of humility that we still don't know everything there is to know about the global impact that this disease will have."
Despite her concern, Shue is still overweight stocks. Her base case is the coronavirus outbreak will plateau this quarter and the global economy will quickly rebound.
"I would expect some further choppiness, some further volatility," Shue said. "But over the next 12 months, we're still optimistic on equities."
