Investors won't be bothered by a Fed taper even if it starts this month, and they're optimistic about 2014 for stocks, JPMorgan's chief U.S. equity strategist told CNBC on Monday.
Good news on November jobs turned out to be good news for stocks on Friday as the Dow Jones Industrial Average and the S&P 500 Index powered higher and closed above their psychologically important levels of 16,000 and 1,800, respectively. But they still did have a losing week for the first time in nine weeks.
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In a "Squawk Box" interview, JPM's Thomas Lee said Friday's jobs numbers increased the probability that the Federal Reserve could start tapering its $85 billion monthly quantitative easing bond purchases at its meeting next week.
"I think a few weeks ago investors would have been pretty concerned about the idea of [a December] taper because the data didn't really give them comfort that the economy was at escape velocity," he said. But "with Friday's jobs report and some of the other ones we've had recently, you know I think investors are getting comfortable if it does happen in December."
Still, he said January seems like a better bet for tapering because there will be several more economic reports released, including the December jobs report and numbers on how the holiday shopping season finished—both of which could give the Fed a better idea if the economy is ready.
(Read more: Economists a bit more upbeat about 2014 forecast)
As for which stocks look good, Lee said, "I think what's been working since May still kind of works into year-end and that means really wanting investors to be cyclical." He also continues to like large cap technology stocks as well as financials.
Bullish since 2009, Lee increased his year-end target for the S&P 500 to at least 1,805—a level exceed on Friday. For the year, the S&P has risen by more than 26 percent as of Friday's close, while the Dow has gained more than 22 percent.