Stocks ‘Reasonable, Compelling’: BlackRock CIO

Stocks remain inexpensive on modest earnings expectation, BlackRock CIO Chris Leavy said Tuesday on CNBC.

"In the short term, some kind of pullback would be perfectly natural and normal to see," he said. "Longer term, though, we still think equities have further to go."

On "Fast Money," Leavy said that valuations were somewhat cheap.

"You're only at 13 times next year's earnings right now, in terms of what we expect for earnings," he said. "That's just not a demanding valuation, and when you factor in all of the share repurchase activity that keeps a bid on this market, combined with some of the positive flows we've seen, we think that any corrections along the way will be reasonably modest and that you'll end the year higher."

In September, Leavy said made the successful bull case for stocks, "Underlying operating earnings grow along with nominal GDP, which'll be around 4 to 5 percent. So if you combine those two things, you're looking a 9 to 10 percent for equities next year."

(Read More: BlackRock CIO: Stocks to Grow 10 Percent in 2013)

Looking forward, Leavy said that his two top stocks were USBancorp and Bank of America, whose earning power would become "more transparent to the Street."

An increase in interest rates over the next couple of years would augur well for the financial sector, which was still cheap, he added.

"There's just not a lot of ideas out there that truly benefit from higher rates and a steepening yield curve, and these stocks will benefit from that," Leavy said.

Trader disclosure: On March 19, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Josh Brown is long AAPL; Josh Brown is long GDX; Josh Brown is long JPM; Josh Brown is long GLD; Josh Brown is long XLU; Josh Brown is long GOOG; Josh Brown is long LULU; Steve Weiss is long BAC; Steve Weiss is long C ; Steve Weiss is short VALE ; Steve Weiss is short RIO; Steve Weiss is short BHP; Joe Terranova is long VRTS; Joe Terranova is long SJM; Joe Terranova is long MJN; Joe Terranova is long SCCO; Joe Terranova is long AAPL; Joe Terranova is long PANW; Joe Terranova is long VSI; Joe Terranova is long AXP; Joe Terranova is long GPS; Joe Terranova is long KORS; Joe Terranova is long GS; Joe Terranova is long SWN; Joe Terranova is short S&P Mini Futures; Simon Baker is long BAC; Simon Baker is long C ; Simon Baker is long WFC; Simon Baker is long CSCO; Simon Baker is long GOOG; Simon Baker is long EBAY; Simon Baker is long AMZN; Simon Baker is long FDX.