Jason Trennert, chief investment strategist at Strategas Research Partners, told CNBC’s “Squawk on the Street” that he likes technology and media companies.
He’s also overweighted in energy, financials and consumer staples. He recommends that investors avoid utilities because “valuations are stretched,” and he believes interest rates will erode returns in the next six to 12 months.
“I would be very careful on China and the emerging markets,” Trennert said Tuesday.
“If you look at the retail participation -- retail investors aren’t usually early on any of these trends -- retail investors, especially in the U.S., have been very attracted to emerging markets and China in particular. That’s usually not a good sign," he explained. "If you look at the technicals in China, all the basic hallmarks of a bubble are there. …It’s just not appropriate for fresh money.”
He said investing in large-cap, multinational U.S. companies is the best way to play economic growth in China, India and other emerging markets, because it eliminates the valuation and liquidity issues now found in many emerging markets.