BlackRock (BLK) managing director Russ Koesterich told CNBC today that the investors have a misleading view of the stock market because they remain fixated on the post-election run in the S&P 500.
"The tone of the market is indicating a little bit more risk aversion than is evident if you look at that headline number," he said on "Squawk Alley."
"On the one hand the S&P 500 is not that far from its all-time high," he continued. However, Koesterich noted that he has observed a defensive approach towards investing in the last month.
"Rates are down, gold is up, more defensive parts of the market have been doing better, [and] value has been struggling a bit," he said.
Koesterich argued that the next catalyst that will drive the markets higher would be individual and corporate tax cuts promised by President Trump and Republican leaders.
(What will move markets this quarter and how should investors position themselves ahead of time? Jim Cramer sat down with four of TheStreet's top columnists recently to get their views. Click here to listen to his latest Trading Strategies roundtable with them and read their advice for stocks, bonds, forex and gold.)