Why the S&P 500 won't break through 2,000

finance.yahoo.com

Earnings season kicks off Wednesday with the traditionally first-up quarterly report from aluminum-maker, Alcoa (AA). But this round of corporate earnings will not provide the guidance many on Wall Street may be hoping for, according to Citigroup strategist Tobias Levkovich.

He believes most companies are not quite ready to look into the crystal ball and offer any real guidance for the coming year just yet. “I think companies are going to do a little bit of a pass on the 2015 [guidance],” he tells Yahoo Finance’s Jeff Macke in the video above. “They’ll talk very general terms, but they won’t want to get into hard numbers this early.”

What's keeping stocks in check?

And that is keeping the markets in check, at least for now, in Levkovich’s view. “We have the Fed concerns - timing, intensity of rate hikes - without the offset of comfort levels about the 2015 earnings, and that’s partially why we think the market is a bit restrained and can only get to 2,000 [on the S&P 500 (^GSPC)] by year end 2014 and we can’t go beyond that.”

Sectors taking a hit

Consensus expectations on corporate earnings this quarter have come down since the period began, led largely by energy stocks thanks to falling oil prices. But consumer staples are also taking a hit thanks to a stronger dollar. “You’re going to hear companies talk about the dollar and it’ll trim some of their fourth quarter numbers as well.”

Asked which sectors will cook this year, Levkovich likes technology, where demand has been relatively strong.