US Bank Asset Management Group CIO Eric Freedman sees three major concerns for domestic equities, beginning with the commercial real estate sector.

“If we see some challenges to fixed-income, we see some auctions go the wrong way, and interest rates turn higher, that could be a challenge for commercial real estate,” he explains to Yahoo Finance. He adds that the sector will certainly feel pressure if rates breach a 5% level.

His second concern lies in potential challenges to liquidity: “Whether it was what was happening in the Treasury market, whether it was happening with the tapering process from the Fed, that’s something that we think will reverse in May."

Freedman’s third and final concern is reliance on large-cap tech: “We do think that corporate CapEx [capital expenditure] is still there. We think there’s still delivery in terms of corporations spending on big data, AI, as well as cyber,” he explains, adding: “If those reverse, we’d have some concerns."

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This post was written by Melanie Riehl