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JPMorgan: Sell dividend stocks, buy banks

A trader works on the floor of the New York Stock Exchange.
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JPMorgan technical analysts advised clients to stay away from high-yield plays like utilities as a rotation out of those stocks appears to be underway.

Instead, the investment bank recommends getting behind financial names, which in the past have benefited from higher rates.

"Our bearish global bond outlook has been one of the main drivers of our equity call over the past month. That favored a sector rotation away from defensive groups like dividend payers andutilities, and into financials, which have shown relative outperformance when rates have trended higher over the past couple of years," wrote JPMorgan technical market strategist Jason Hunter.

Into the end of the year, Hunter believes the bearish trend for Treasurys will extend. As a result, he predicts the rotation will continue.