Nobel Prize winning-economist Robert Shiller says the U.S. equities markets are "quite high" currently but may go even higher in coming months, and that's why he's not exiting the market completely. To be sure, there's another thing that could have an unpredictable effect on the market: The narrative around Donald Trump.

"Short-run forecasting of the market is very hard," said Shiller. "I think it's a time for caution, but it could go up substantially."

Still, there are areas of the market that he believes are undervalued, namely consumer discretionary, industrials, healthcare and technology.

The market and the overall economy could get stronger under President Trump, depending on how his narrative plays out.

Shiller wrote a paper in January 2017 titled Narrative Economics, which is the study of the "spread and dynamics of popular narratives, the stories, particularly those of human interest and emotion, and how these change through time, to understand economic fluctuations." In the report, he said that Donald Trump is "a master of narratives."

The Nobel laureate said the Trump narrative, which is centered on business, a return to traditional values, self-reliance, deal-making and "telling it like it is," is still very strong.

"If you look at history, it's a rare example of someone who is able to take over the national conversation as much as Trump has," Shiller said.

But Shiller noted that history is still being made.

"How his presidency turns out is one of those unpredictable things," said Shiller. "I really can't predict what the markets are going to do in response to this particular narrative."

Notably, a new Reuters poll showed that U.S. stocks will rise marginally in the second half of the year, with the S&P 500 projected to end this year at 2,460, "only one percent above Wednesday's close of 2,440.69."

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Editors' pick: Originally published June 29.