The major indexes may be kicking off the month in rally mode, but PNC Financial's Amanda Agati sees trouble under the hood.
She believes the rotation into economically sensitive market groups from stay-at-home plays is overdone.
"The value side of the equation — that 'go outside' trade — has really moved way too far and way too fast for where we are at this stage of the reopening," the firm's managing director and chief investment strategist told CNBC's "Trading Nation" on Monday.
Agati finds the move into value stocks first gained momentum in November due to optimism surrounding the efficacy of Pfizer's vaccine.
"We've seen this massive sentiment shift," Agati said. "But at the end of the day, we really haven't seen the underlying fundamentals improve in a big way."
Within the U.S. stock market, she'd rather be in 2020's winners: The stay-at-home growth stocks, which includes big tech.
"They just continue to put up really impressive results from an earnings growth perspective and just general profitability and underlying fundamentals," she added. "Although we've seen valuations rally pretty significantly there, I think the longer term view from our perspective is that we will continue to be very much in a growth-starved and yield-starved world. And so, what wins in that environment? Many of the components of the stay-at-home trade."
Monday's strong market performance aside, inflation jitters have been pressuring growth plays over the past couple of weeks. The group is particularly vulnerable to rising Treasury yields because they affect valuations.
But Agati believes inflation worries are temporary.
"We're basically looking at the next three months relative to record no activity – not just record low, but record no activity as a function of the lockdowns," she said. "Of course, you're going to start to see CPI [Consumer Price Index] creep higher and inflation expectations rise."
Agati lists higher prices for lumber, health care and child care as examples of inflation that have already hit the marketplace.
"This is not the kind of thing that's likely to become a long-term risk to the economic recovery," she added.
Agati, who oversees $170 billion in assets for the firm, believes the threat of higher taxes will provide a backstop for inflation later this year.
"The minute the tax hike story comes back into the equation, we do think that's going to put the brakes on things and settle things down a bit in the bond market," said Agati.
But it's also an issue that would bring challenges to stocks.
"It certainly will put some brakes on the equity market as well in terms of the trajectory of earnings growth," Agati said.