PNC Financial's Amanda Agati is on alert.
With the major indexes on the cusp of their second positive month in a row, the firm's chief investment strategist believes stocks are getting too expensive, and the historic rebound may soon hit a breaking point.
"The market is getting pretty far ahead of itself," she told CNBC's "Trading Nation" on Thursday. "The market is really pricing for perfection here."
Since the March 23 low, the S&P 500 and Dow have surged 38% and 39%, respectively. Meanwhile, the tech-heavy Nasdaq is seeing an even bigger rally. It's up 41% since then.
"It's not the good kind of multiple expansion that we're seeing here with the bottom dropping out of earnings especially for smaller cap names where leverage is basically sitting at all-time highs," said Agati.
According to Agati, it's premature to assume the coronavirus threat is moving to the back burner as the economy reopens. Plus, she suggests a vaccine could be further away than the market anticipates.
"The biggest risk and opportunity for the market comes down to the path of the virus and Covid-related data," said Agati. "The worst case scenario for the market would be a second wave that would force us to shut things down again or it completely crushes the psyche of the consumer."
She also questions the rally's breadth.
"Covid has really just for the most part accelerated a number of preexisting trends," she said. "The narrow leadership beforehand [are] the same kind of four sectors we see lead now: Communication services, staples, health care and tech."
Agati, who's positive on the longer-term prospects for the market, isn't convinced a sustainable rotation into value from growth stocks is taking place either because the fundamental backdrop is so severely challenged.
She contends there are no signs of improvement or a bottom forming in key value groups including energy, financials, retail and parts of industrials.
"It's going to be a tough path here," Agati said.