U.S. stock and bond markets are fairly valued, if not somewhat overvalued given the current macroeconomic backdrop, said Jim Sarni, managing principal at Payden & Rygel (PYCBX - Get Report) . With that in mind, investors better watch out for a sharp drop in oil or a sudden downturn in economic growth. Sarni said more than one short-term interest rate hike in 2016 from the Federal Reserve will also hurt the market, although he regards this probability as low considering the worse-than-expected May jobs report. In his view, while the Fed may want to raise rates it seems as though the data keeps getting in the way. 'Notwithstanding Friday's employment figures, a case can still be reasonably made that higher short-term rates are warranted sometime in 2016 if for no other reason than to begin the interest rate normalization process as it seems clear to us that the U.S. economy no longer needs an emergency level policy,' said Sarni.