Markets to Pull Back 3-5%: Strategist

Investors shouldn’t worry about the current market selloff as global indices are due for a "healthy" pullback of three to five percent, according to Alec Young, Global Equity Strategist at S&P Capital IQ.

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“It’s healthy after such a good run from the start of the year,” he said. “People are looking for any excuse to take profits.”

Markets are trading lower on concerns of a hard landing in China after the country dropped its GDP (gross domestic product) forecast for the year, as well as the Greek debt swap take-up, Young told CNBC.

Indeed, the recent events have forced Young’s company, S&P Capital IQ, to change its view on the markets from being positive in December to lukewarm now.

“The rally in U.S. and Europe has brought us close to year-end target. Hence, we have turned more cautious due to a lack of upside to target,” Young told CNBC.

But long-term the company remains positive on global equities.

Before the sell-off, Young’s view was that U.S. markets were looking past what was happening in Europe. However, his view has changed somewhat, with him saying that relative to last year, U.S. markets have moved past the euro zone debt crisis.

Regarding the Greek debt swap deal, Young said it won’t derail the progress made in the euro zone crisis, despite ongoing doubts on the take-up from banks.

He also expects a soft landing for China, and the country’s GDP coming in closer to 8 percent for the year.