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3 Sectors to Weather Rates: Pro

Improvement in the economy will benefit three stock market sectors, S&P Capital IQ Global Equity Strategist Alec Young said Tuesday.

"We'd be looking to buy, especially domestic cyclicals, discretionary, financials," . We think that the economy is going to continue to heal. We don't think the rate spike is going to be enough to kill this recovery."

On CNBC's "Fast Money," Young said that the bond market has gotten ahead of the data.

"It's priced in the first taper. It's priced in some better growth," he said. "So, I think when we actually get the growth, which we believe you will see, you will see a more muted rise in the 10-year."

(Read More: Correction or Start of a Bear Market?)

Young also said he would avoid China-related investments.

Trader disclosure: On June 25, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Joe Terranova is long VRTS; Anthony Scaramucci is long AAPL; Anthony Scaramucci is long BAC; Anthony Scaramucci is long C; Anthony Scaramucci is long MS; Anthony Scaramucci is long GOOG; Steve Weiss is long C; Steve Weiss is long BAC; Steve Weiss is long AIG; Steve Weiss is long THC; Mike Murphy is long BAC; Mike Murphy is long VLO; Mike Murphy is long LEN; Mike Murphy is long FB.

"The one thing that keeps me up at night is this China credit situation," he said. "I know they've come in and jawboned the markets into a little bit of a state of calm here last night, but I don't believe we've seen the last of the China credit mess."

Although China should see growth continue to grow, Young cautioned about a "slow bleed."

(Read More: China Credit Bubble Trouble: Jim Chanos)

"I think for 2013, China's not going to kill you," he said.

"But I don't think people should think that this flare-up in the interbank market this week is the last that you're going to hear of the Jim Chanos argument. I think there's a good chance that Jim's bear case really comes good next year."

Trader disclosure: On June 25, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Joe Terranova is long VRTS; Anthony Scaramucci is long AAPL; Anthony Scaramucci is long BAC; Anthony Scaramucci is long C; Anthony Scaramucci is long MS; Anthony Scaramucci is long GOOG; Steve Weiss is long C; Steve Weiss is long BAC; Steve Weiss is long AIG; Steve Weiss is long THC; Mike Murphy is long BAC; Mike Murphy is long VLO; Mike Murphy is long LEN; Mike Murphy is long FB.

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