This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

BlackRock Strategist Urges Caution Amid Market's Recent Surge

Equity markets are poised for a retreat after reaching record-high rallies, said BlackRock's top investment strategist.

Russ Koesterich, the global chief investment strategist at BlackRock, said the magnitude of recent gains in the stock market is causing some indicators to "flash yellow."

After spiking a couple of weeks ago, volatility measures have again fallen, suggesting that market complacency may be indicating investor wariness that the market can climb much further. A pullback in stocks appears to be in progress, Koesterich said.

The BlackRock strategist also said corporate earnings growth has not kept pace with stock price gains, meaning that valuations are less attractive than they were a few months ago even though they remain cheap compared to bonds and cash.

"While none of this means that the rally is over, it does suggest that investors should become more selective as they look at potential investment opportunities," Koesterich said.

U.S. mega-cap stocks look particularly attractive in this regard, offering compelling valuations and high profitability, he said. In contrast, small-cap stocks are looking relatively expensive in his view.

In midday Wednesday, the S&P 500 was off 0.11% at 1,550.68 on midday on Wednesday following the gauge's seven-day winning streak that pushed the index to its highest level in more than five years.

The Dow Jones Industrial Average was dropping 3.46 points, or 0.02%, to 14,446.6 after the blue-chip index on Tuesday recorded an eighth-consecutive winning session, catapulting the gauge to a record high.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,880.36 -31.75 -0.19%
S&P 500 1,970.07 +0.12 0.01%
NASDAQ 4,462.9020 +20.2040 0.45%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs