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Financials ‘Leading Us Higher’: Murphy

Financials Still Hot?
Financials Still Hot?

The financial sector will lead the stock market higher, Rosecliff Capital's Mike Murphy said Thursday on CNBC.

"If you believe in the market going higher, which I do, you have to believe that it's going to be led by financials, so you pick the best names, the JPMorgans, the Bank of Americas, Goldman Sachs, really, right at the top," he said. "Until it starts to fade, it's not going to. Even when you had a one-day pullback, but they all held their key levels."

On "Fast Money," Murphy said that he liked pure plays in financials, such as the XLF.

"They're working right now," he added. "Stick with that trade."

TheStreet CIO Stephanie Link said that she was looking to smaller banks.

"One of the names that we're looking to get back into is SunTrust because of the housing exposure," she said. "If the economy gets better, the yield curve steepens, these guys make more money. But last year, they got snubbed on the stress test. This year, I think they're not, and I think that's a catalyst."

Josh Brown of Fusion Analytics preferred a more indirect play.

"You can look at something like a Berkshire Hathaway, which is hugely levered to the housing recovery, and its biggest position is Wells Fargo," he said. "You get that kind of indirect financial exposure, but you have exposure to other things. You could also be in the credit card names, which look outstanding."

Brown also agreed with Link in seeking a more diversified positioning.

"There's going to be a second leg to the story, and it probably won't just be capital markets," he said. "It'll be wage growth. It'll be housing stuff, so I would start looking elsewhere."

Joe Terranova of Virtus Investment Partners touted corporate bonds, citing comments from JPMorgan's CEO.

"When you have Jamie Dimon tell you, you have so much cash on the balance sheet that he doesn't know what to do with it, that is an excellent environment given where Fed policy is, as well, to own corporate bonds in financial institutions," he said.

Terranova also said that he liked regional banks such as Comerica and Zions Bancorporation.

"Regional banks – incredible source of opportunity," he added.

Trader disclosure: On Feb. 28, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Joe Terranova is long VRTS; Joe Terranova is long SJM; Joe Terranova is long MJN; Joe Terranova is long AXP; Joe Terranova is long GPS; Joe Terranova is long KORS; Joe Terranova is long GS; Joe Terranova is long SWN; Josh Brown is long AAPL; Josh Brown is long C; Josh Brown is long JPM; Josh Brown is long WFC; Josh Brown is long GLD; Josh Brown is long XLU; Josh Brown is long WMT; Josh Brown is long TGT; Josh Brown is long GOOG; Mike Murphy on FB; Stephanie Link is long AAPL; Stephanie Link is long GS; Stephanie Link is long CSCO; Stephanie Link is long SBUX; Stephanie Link is long FB; Stephanie Link is long STI; Stephanie Link is long KEY; Steve Grasso is long AAPL; Steve Grasso is long ASTM; Steve Grasso is long BA; Steve Grasso is long GOOG; Steve Grasso is long GDX; Steve Grasso is long LF; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long PXD; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is long VLO; Steve Grasso is funds long HPQ; Steve Grasso is funds long ZNGA; Steve Grasso is funds long HD; Steve Grasso is funds long BRCM; Steve Grasso is funds long MA.