4 stock picks to play ahead of taper

Friday, 2 Aug 2013 | 5:58 PM ET
4 picks to play ahead of taper
Friday, 2 Aug 2013 | 5:05 PM ET
The current policy climate makes it a good time to be an investor in certain areas, Mark Kiesel of PIMCO says.

The current policy climate makes it a good time to be an investor in certain areas, PIMCO's Mark Kiesel said Friday.

"Well, the taper's probably still there, but the bigger picture is really the policy rate and the growth," he said.

"PIMCO sees a 2 percent real growth forecast. The Fed actually sees in 2014 to 2015 a 3 to 3½ forecast."

(Read more: Should you factor taper into trades?)

On CNBC's "Fast Money," Kiesel, who is managing director and global head of corporate bond portfolio management, said that absent a strong labor market, the trade was clear.

"The bond market at these yield levels is actually very attractive," he added. "We're underweight the long end of the yield curve."

Kiesel said that he liked sectors that would benefit from an easy-money policy, such as autos, airlines, energy and housing.

"This is a good time to be an investor and to take advantage of bottom-up opportunities where the growth rates are significantly higher than that 1½ to 2 percent," he said.

Hold 'em or fold 'em: NKE, LMT, MS &CHK
CNBC's Steve Liesman reports on Jim Bullard's public remarks suggesting the Fed's need for more data before tapering. And the "Fast Money" traders have the play on Nike, Lockheed Martin, Morgan Stanley, and Chesapeake Energy.

(Read more: Top ideas from an 'ultimate stock picker')

Bond yields, he added, will head lower.

"We think they're going to head down toward 2¼ to 2½, and that's simply a function of the fact that the market is overshot due to technical," he said, adding that the unemployment rate wasn't likely to come down as fast as it has in recent years.

"It means the roll-down in the intermediate part of the bond market is very attractive," Kiesel added.

Housing plays would benefit, he said, but not where many investors might be looking.

(Read more: Stock market's 'healing trend' to continue into 2014)

"Housing starts basically bottomed about a year-and-a-half ago," he said. "The remodel activity lags the recovery in housing by about 18 months. So, remodel is just kicking in, and who's going to benefit from that?"

Kiesel said that he liked companies such as Masco, Whirlpool, USG and Weyerhaeuser.

"Those are the companies to own, not the home builders," he added.

By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.

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