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‘Cash Is Trash Right Now’: Strategist

Tuesday, 7 May 2013 | 1:04 PM ET
'Cash Is Trash Right Now': Strategist
Tuesday, 7 May 2013 | 12:03 PM ET
A couple of cyclical sectors appear to have further gains ahead, David Bianco of Deutsche Bank says.

A couple of cyclical sectors appear to have further gains ahead, despite an expected 5 percent pullback in the overall market, Deutsche Bank Chief Equity Strategist David Bianco said Tuesday.

Well, I'm certainly constructive for the full year even with the market right at my price target for year end," he said, adding that he expected a "moderate pullback, about 5 percent" for the summer due to weakening earnings outlook and a global manufacturing slowdown.

On CNBC's "Fast Money," Bianco noted that only three years since 1960 didn't see a 5 percent dip from the 12-month high: 1964, 1993 and 1995.

"But to be fair, this is one of those years that looks like those three exceptions — really strong start to the year, very accommodative monetary policy," he said. "The one exception is, as I said, the earnings growth is not robust."

Bianco said that two cyclical sectors were worth buying.

"We don't like cash. Cash is trash right now," he said. "What we like are the banks and the technology sector, so, yes, I'm overweight cyclicals, and I've got a preference for dividend-growth stocks."

On the flip side, Bianco urged caution on three cyclical areas: Energy, metals and miners.

"That's where I want to see commodity prices prove their resiliency with the stronger dollar over the course of the summer," he said.

Trader disclosure: On May 7, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Stephanie Link is long AAPL; Stephanie Link is long GS; Stephanie Link is long JPM; Stephanie Link is long CSCO; Stephanie Link is long FB; Stephanie Link is long TKR; Stephanie Link is long EMC; Stephanie Link is long CSCO; Josh Brown is long AAPL; Josh Brown is long XLU; Josh Brown is long TGT; Josh Brown is long DIS; Josh Brown is long GLD; Josh Brown is long APC; Josh Brown is long DD; Simon Baker is long AAPL; Simon Baker is long JPM; Simon Baker is long WFC; Simon Baker is long XLF; Simon Baker is long FB; Simon Baker is long MSFT; Simon Baker is long GOOG; Simon Baker is long EBAY; Simon Baker is long NFLX; Simon Baker is long DIS; Simon Baker is long AMZN; Simon Baker is long BBY; Simon Baker is long CSCO; Mike Murphy is long BAC; Mike Murphy is long INTC; Mike Murphy is long FB; Mike Murphy is long IP.

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