Three large factors are exerting downward pressure on stocks, Wells Fargo Securities Institutional Equity Strategist Gina Martin Adams said Thursday on CNBC.
"I think that the fundamental case is actually weakening going forward," she said on "Fast Money." "If you take a look at the sequence of earnings growth, we really started to see earnings teeter in the second quarter, and that's continued into the third quarter."
Adams looked at three factors for getting cautious: Earnings, valuation and policy uncertainty.
(Read More: S&P to 1,550 — Then 'Off the Cliff': Sam Stovall)
Economic concerns in Europe were a headwind, but uncertainties surrounding the "fiscal cliff" have served to acerbate problems.
Adams said that it wasn't necessary to solve the "fiscal cliff," which would trigger automatic federal spending cuts in January and see the expiration of the Bush tax cuts.
(Read More: S&P Could Still Hit 1,600 Year-End: Bannister)
"We just need to have a revival in sentiment, a revival in confidence, and that probably comes with a plan being set," she said. "We need a credible plan."
Trader disclosure: On Oct. 25, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Stephanie Link is long AAPL; Stephanie Link is long JPM; Stephanie Link is long SBUX; Stephanie Link is long VALE; Stephanie Link is long EMC; Stephanie Link is long IBM; Joe Terranova is long VALE; Joe Terranova is long SBUX; Joe Terranova is long SWN; Joe Terranova is long TRV; Joe Terranova is long VVZ; Joe Terranova is long XOM; Joe Terranova is long CVX; Joe Terranova is long GS; Joe Terranova is long GLW; Michael Murphy is long AAPL; Michael Murphy is long WFC; Michael Murphy is long TGT; Michael Murphy is long TWI; Michael Murphy is short FB; Enis Taner is long AAPL PUTS; Enis Taner is long GS; Enis Taner is long WYNN PUT SPREAD;
For Toni Sacconaghi
Toni Sacconaghi maintains a long position in Seagate Technology (STX).
All statements in this report attributable to Gartner represent Bernstein's interpretation of data, research opinion or viewpoints published as part of a syndicated subscription service by Gartner, Inc., and have not been reviewed by Gartner. Each Gartner publication speaks as of its original publication date (and not as of the date of this report). The opinions expressed in Gartner publications are not representations of fact, and are subject to change without notice.
Bernstein currently makes a market in the following companies AAPL / Apple Inc.
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