With central bank policies set to diverge, volatility, credit spreads and market overreactions will continue to distract investors in 2016.
"We are back to a high volatility and high risk aversion environment," said Aguilar. "The risk to the economy is very low though. I think we will see a lot of fear, but I do think this is only a realization that we are in a slow growth environment."
The currency war being fought by the world's central banks is creating winners and losers in the U.S. stock market. Aguilar said technology stocks will be in the best position to outperform, primarily because of their international business. Financial stocks will also perform well, in his opinion, because of the move up in U.S. interest rates.
On the flip side, multi-nationals that have exposure to the dollar's strength will be hit hard in this environment. Caterpillar (CAT) - Get Report proved to be a prime example of this when it reported sluggish fourth quarter sales on Thursday.
"When you think about anything that is related to the oil sector, it will also have a hard time," said Aguilar.
Aguilar added that oil is now directly correlated with stocks because when oil goes down worries crop up about the financial health and creditworthiness of the energy sector.
"Oil is being seen as a proxy for risk," said Aguilar. "People are thinking about oil as a way to extrapolate their views on risk and it's very correlated to risk aversion. When oil goes up, people think things are going to get better."
Regarding China's impact on the U.S. market, Aguilar said the Chinese transition from a manufacturing to a consumer based economy will continue to affect domestic stocks. He said he expects a number of U.S. companies to reduce their numbers vis-à-vis China, especially after Apple (AAPL) - Get Report cited weak demand there in its earnings report this Tuesday.
Finally, Aguilar said he expects the Federal Reserve to proceed with at most two rate hikes this year due to the volatility it is helping to whip up.