The Fed just raised rates, here are three groups to buy

J.P. Morgan Private Bank's Stephen Parker is highlighting three groups that could outperform as interest rates climb.

His first top pick: energy.

"If you go back and look historically near the end of a cycle, energy has almost always outperformed and often times by a pretty meaningful amount," the bank's head of thematic equity solutions said on CNBC's "Trading Nation." "The reason for that is you tend to see a pickup in inflation."

His thoughts came on Wednesday shortly after the Federal Reserve announced its second interest rate hike of the year and suggested two more increases are still possible.

According to Parker, the Fed's intention to raise rates multiple times in 2018 also bodes well for financials — particularly regional banks.

"Obviously, there's the trade on higher rates," Parker said. "They are also big beneficiaries of deregulation [and] tax cuts. I think you could also start seeing as a result of this deregulation, a pickup in M&A activity in which these regional banks could be attractive targets."

For his third pick, he favors emerging markets. Despite pressure from a rising dollar, Parker said some emerging economies are showing much more resilience than previous cycles.

"When you look for example at emerging Asia, one of our favorite regions, that's actually still up for the year," Parker said. "If we were to see a meaningful rally in the dollar, certainly that would impact sentiment negatively. But we think this weakness is an opportunity to get in."

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's Closing Bell (M-F, 3PM-5PM ET). In addition, he contributes to CNBC and CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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