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Stocks no longer a 'layup' -- Here's how to score: Affinity's Jeremy Hill

Daily Ticker

Russian President Vladimir Putin signed a treaty to annex Crimea Tuesday, but at the same time he sought to reassure Ukrainians that Moscow has no intentions for any of Ukraine's other territories and isn't planning to send troops further into Ukraine.

Major stock market indexes headed higher after Putin's speech, following a rally on Monday that saw the S&P 500 (^GSPC) move into positive territory for the year. U.S. equity markets shook off Sunday's Crimea vote to rejoin Russia, as well as U.S. and European sanctions levied against Russian and Ukrainian officials key to the conflict. 

Related: 'The Russians are not finished': Sanctions won't stop Putin, says Eurasia Group's Sparks

Jeremy Hill, principal at Affinity Investment Advisors, tells us in the accompanying video that he doesn't think markets are done caring about the conflict between Russia and Ukraine. He says we may "still be in the first inning of this whole ordeal," but the action Monday leads him to believe the developments in Crimea were already baked into the pricing of risk assets.

Related: Ukraine crisis roils markets: Which global economic power is most at risk?

More generally when it comes to macro risks to financial markets, Hill cites "a lot of geopolitical tension,"  Federal Reserve tapering, the emerging market "blowup" this year (he thinks we'll continue to see stress in that sector), and the looming impact of bond yields rising.

Conjuring a basketball analogy, Hill says, "Right now playing the market is a little more like shooting a three-pointer with somebody's hand in your face versus a layup," like we had last year.

Related: Markets are headed higher but stick with defensive stocks: Gary Shilling

Hill says U.S. stocks "probably won't go a lot higher absent better U.S. economic data." Even still, looking at the risk/reward of stocks versus other asset classes, Hill thinks U.S. equities are a safer bet compared to alternatives. Watch the video to see why and which single sector may be worth paying attention to. 

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