CNBC Stock Blog

Taxes Will Drive Rebound in Second Half 2012: CEO

Jennifer Leigh Parker|Writer,

Consensus among investors says that European gridlock caused a flat performance in U.S. stocks this year.

Late next year, however, things will turn around with or without a clear sign of economic upturn in Europe, says Joseph Duran, CEO of wealth-management firm United Capital.

"The two halves of 2012 will look and feel very different," he says. "The first half is going to be a positively biased, but volatile period, primarily because the European mess is still with us."

Yet Europe will not remain the focus for the equity investor, Duran predicts. The U.S. political battle over taxes will take center stage.

"The reason the second half of the year could be a lot stronger, is that almost certainly taxes will be going up, which will force an large increase in (gross domestic product) as everyone sucks earnings in 2012, not wanting to pay higher taxes in 2013," Duran says.

Duran is basing his prediction largely on the fact that a 4 percent tax increase on investment income is expected in 2013.

BlackRock's Bob Doll agrees with Duran, in part. While Doll is also bullish on 2012, noting the strength of U.S. corporate earnings, he isn't waiting until late next year to invest.

The health-care sector, he says, has some great buying opportunities now.

"Drug companies have more cost cutting opportunities, have good yield, and some of them  have positive free cash flow," he says.

Doll's picks include: United Healthcare, Aetna , Wellpoint , Pfizer , Eli Lilly , and Bristol Meyers .

On technology, Doll will wait. "I think Microsoft is just beginnning to turn the corner. On Apple , I think the time is around the corner. Let's say next spring will be another lift to the stock."

Duran follows Doll's comments with caution, saying equity investors should manage risk with dividend paying companies until 2012 starts to pick up.

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Disclosure information was not available for Bob Doll or his company.