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No Risk in QE Tapering: Strategist

Reduced asset purchases from the Federal Reserve would mean the economy's stronger, which would be a positive for stocks, UBS Chief Equity Strategist Jeremy Zirin said Thursday.

"If economic growth is picking up, and that's the cause of the Fed starting to taper, that's a positive for corporate profits," he said. "It should be a positive for the market."

On CNBC's "Fast Money," Zirin said that other rationales for reducing asset purchases would be cause for concern.

"I think the one thing that we need to think about, though, that's the risk factor is that the Fed starts to taper for non-economic reasons because they start to view the risks of an expansive balance sheet heading toward $4 trillion as causing either asset bubbles or causing financial instability," he said.

"I think that's the risk of the taper or tightening of monetary policy. There's not a risk of a gradual, data-dependent taper because that means that the economy's growing faster, corporate profits are growing faster. And with equity market multiples at 14 times my 2014 S&P 500 profit estimate, I don't think that there's really that much downside risk in terms of valuation."

Zirin said that he had been "bullish all year" based on an expected economic recovery, albeit a slow one.

(Read More: Bearish Doug Kass 'Staying the Course')

"Corporate profits, which people were very concerned about in the first quarter because of the fiscal drag and higher tax rates, still grew 4 percent year on year," he said. "I expect modest reacceleration of corporate profits, and I think valuations can head a bit higher from here."

Zirin said that he favored cyclical stocks, which were trading at a 13 percent discount to defensive stocks.

"It's their biggest discount that we've seen in 20 years," he added. "Usually, cyclical stocks trade at a 10 percent premium."

(Read More: Pullback 'A Great Opportunity': Pete Najarian)

Trader disclosure: On May 23, 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 EBAY; Stephanie Link is long WFC; Stephanie Link is long COST; Joe Terranova is long JULY CRUDE OIL FUTURES; Joe Terranova is long MINI S&P FUTURES; Joe Terranova is long VRTS; Joe Terranova is long SJM; Joe Terranova is long AAPL; Joe Terranova is long SPLK; Joe Terranova is long TBT; Joe Terranova is long SWN ; Joe Terranova is long IBM; Pete Najarian is long AAPL; Pete Najarian is long BAC CALLS; Pete Najarian is long C CALLS; Pete Najarian is long GS CALLS; Pete Najarian is long JPM CALLS; Pete Najarian is long WFC CALLS; Pete Najarian is long XLF CALLS; Pete Najarian is long INTC CALLS ; Pete Najarian is long BBRY; Pete Najarian is long SBUX; Pete Najarian is long FB; Pete Najarian is long FB CALLS; Pete Najarian is long MSFT; Pete Najarian is long C; Anthony Scaramucci is long AAPL; Anthony Scaramucci is long BAC; Anthony Scaramucci is long GS; Anthony Scaramucci is long JPM; Anthony Scaramucci is long MS; Anthony Scaramucci is long WMT; Anthony Scaramucci is long GOOG; Doug Kass is long AAPL.

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