Financials, industrials and technology stand to perform as businesses ramp up spending in the coming months, UBS Chief Equity Strategist Jeremy Zirin said Thursday.
"For investors truly with a six- to 12- month time horizon, I think they should focus on the fundamentals, and ultimately the fundamentals for this market are "going to move higher," he said. "You look at the growth outlook, the policy outlook, valuation; we expect that economic growth picks up over the next six to 12 months."
On CNBC's "Fast Money," Zirin also said that economic growth would be modest and that equities remained relatively inexpensive.
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"We're looking at GDP growth in the 2½- to 3-percent range next year. The earnings setup for this quarter looks pretty attractive," he said. "And we're trading at 14 times earnings. And the appointment of Janet Yellen says that we're going to have a dovish Fed for probably longer than we were ... anticipating."
Zirin, who has a base six-month base target of 1,770 for the S&P 500, said the best-positioned sectors were financials, industrials and technology.
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An increased demand for loans would boost bank shares, he said. "But I also want to focus on those sectors that are going to benefit from a turn in the capital spending cycle.
"So far, this economic recovery has been almost entirely driven by housing, autos and the U.S. consumer. I think we're at an inflection point where we're seeing better demand for capital spending, and so industrials and tech should be the primary beneficiaries."