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JPMorgan's long-term bet on a US recovery

Cyclical stocks have the best potential for upside amid a U.S. recovery, JPMorgan Private Bank Chief Investment Strategist Kate Moore said Wednesday.

"We're still very cyclically biased in all of our portfolios," she said. "And to be fair, there have been quarters this year and months this year that it has not been the best play, but we feel very convinced and confident in the U.S. recovery. We feel very comfortable owning tech as a broad sector, still financials. We like parts of energy. And on the kind of counterbalance, we've been owning a lot of health care."

On CNBC's "Halftime Report," Moore, who oversees $992 billion in assets, said that she expected the trend to continue.

Adam Jeffery | CNBC

"In a secular bull market, and there are a lot of individual trends that support the sector, I think, going forward," she said.

Moore said that she saw a bet on financials as a long-term bet hinging on rising interest rates.

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"Like a lot of people, we came into 2014 expecting rates to rise through the balance of the year and that was going to support, we thought, net interest margins and we're looking for a pickup in credit, which has come through," she said. "We think financials are going to do well as rates rise over the next 12 to 18 months, and we still see the environment, as I mentioned, for macro growth and for activity really positive."

Moore said that fixed-income investments have remained a part of JPMorgan Private Bank's portfolios, keeping durations low relative to its benchmarks.

"We actually use hedge funds and relative value strategies, in particular, to balance out our reduction in overall bond ownership," she said. "So, we're looking to get the same kind of volatility we've historically gotten from fixed income, but in parts of the market and using these kinds of managers and these strategies that we think can do well even in a rising-rate environment."

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Moore said she viewed large-cap technology names and S&P 500 banks favorably.

"A lot of the large-cap tech, I think, had been under-recognized by the market, particularly the beginning of this year—and is a huge beneficiary of increased cap ex and more corporate spending, more so than, we think, other sectors," she said.

Moore also said she was bullish on the United States.

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"U.S. is our No. 1 country and regional choice at this point," she said. "But we do have exposure to emerging markets. We specifically own emerging Asia and not necessarily Brazil. We see the earnings growth, the macro and some of the sentiment still being kind of bearish on emerging markets leave more room, we think, (for) upside in Asia."

This version corrects the value of assets under management as $992 billion.

By CNBC's Bruno J. Navarro

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