Market bull gives three winning sector picks through next year

If the United States works out its trade issues, then B. Riley FBR's Arthur Hogan sees stocks blasting through his 2018 year-end target, on their way to another profitable year ahead.

It's a scenario reflected in the long-time bull's current investment strategy.

On CNBC's "Trading Nation," Hogan gave three winning picks to get investors through the next 16 months.

1. Technology

According to Hogan, technology's rapid growth will continue into next year.

"I think technology will significantly outperform and probably be the lead sector in the S&P 500," the investment firm's chief market strategist said Friday.

2. Health care

He also believes health care will grab solid gains.

Hogan noted health care will become the second largest sector in the S&P on September 28. That's when some of technology's biggest stocks such as Facebook, Netflix and Alphabet officially become part of the newly minted Communication Services sector. He suggested the shift could make health care look more attractive.

3. Financials

He's also very bullish on financials.

"I think financials will finally catch a leg because of rising interest rates on the long end of the curve. We are going to see some spread, and I think that is something that the financials have been waiting for," he added. "So, the fundamentals behind the financials are very solid. And, I think they have rock solid balance sheets, and I think they are undervalued."

His hunch is the S&P 500 will end 2019 around 3200, about an 11 percent gain from Friday's close and above Hogan's target of 3000. So, stocks are generally where he wants to be.

"I'd be afraid of anything that looks like a bond," said Hogan, who expects yields to begin moving higher in the coming months — diminishing the attractiveness of that asset class.

Vote
Vote to see results
Total Votes:

Not a Scientific Survey. Results may not total 100% due to rounding.

Videos

Trades to Watch

Trader Bios

About

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.

Sara Eisen

Sara Eisen joined CNBC in December 2013 as a correspondent, focusing on the global consumer. She is co-anchor of the 10AM ET hour of CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET), broadcast from Post 9 at the New York Stock Exchange.

In March 2018, Eisen was named co-anchor of CNBC's "Power Lunch" (M-F, 1PM-3PM ET), which broadcasts from CNBC Global Headquarters in Englewood Cliffs, N.J.

Read more

Connect