JPMorgan Private Bank is not yet bearish on the market, but its portfolio is much more balanced these days, the firm's global head of equity strategy said Wednesday.
Steven Rees said JPMorgan sees the ending the year at 2,025, down about 25 points from Wednesday's levels. In this environment, the firm is rotating its exposure away from the broad U.S. market and into select sectors.
"We saw a really exciting earnings season where you had a lot of winners, but you also had a lot of losers, so for us, this argues for active management," Rees told CNBC's "Squawk on the Street."
While the tech sector delivered a mixed bag of earnings results, Rees said he believes areas such as cloud computing, mobility and big data remain intact. JPMorgan intends to add stocks selectively, he said.
Health care also looks attractive, he said, despite concerns about pricing during a presidential campaign season in which both the Democratic and Republican front-runners support allowing Medicare to negotiate drug costs.
The earnings growth rate for the health-care sector stands at about 5 percent year over year, compared with a roughly 6 percent decline for overall corporate earnings, he noted. JPMorgan is adding selected health-care stocks, particularly shares of higher-quality companies that offer dividend yields.
Rees said he has grown more constructive on European equities, as well. That continent's economy remains on track, corporate earnings have more gains to recover relative to the United States and equity valuations are currently attractive, he said.