Stocks still the best investment: Strategist

Improvement in economic indicators means equities are headed higher long-term, US Bank Chief Equity Strategist Jim Russell said Wednesday.

"The taper is key," he said, noting that the run-up in stocks hinged on multiple expansion. "It's not been an earnings-driven market."

Russell, who has a year-end target of 1,760 in the S&P 500, said that he expected the Federal Reserve to begin drawing down its $85 billion-per-month of bond purchases next month.

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"We do think the jobless claims number are sufficiently strong to perhaps bring that into execution mode," he said.

Russell, however, also noted that September would likely see a face-off in the U.S. Congress on raising the federal debt ceiling.

"We would expect a little more volatility," he added.

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Russell also said that the stock market had been "caught off-guard with a couple of things," namely, that the ISM numbers would be strong and that initial jobless claims would be lower.

Overall, Russell, who has $112 billion in assets under management, said that he expected economic data around the world to continue to improve, which would mostly benefit three stock sectors:

Industrials had a "great global reach, reasonable valuation" and dividend yields working in its favor, Russell said, as well as "global macro winds."

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Finanicals held promise but were a sector with which to be selective, especially ahead of Basel III, he added.

Technology was another sector poised to improve, but Russell also suggested being selective.

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"I think it's a huge global positive, candidly, that Europe is now out of recession," he said. "So, I do think the direction is up on global basis, as well as in the U.S."

By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.

Trader disclosure: On Aug. 15, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Josh Brown is long F; Josh Brown is long AAPL; Josh Brown is long XLU; Josh Brown is long XLF; Stephen Weiss is long M; Stephen Weiss is short JCP; Michael Murphy is long BAC; Michael Murphy is long C; Michael Murphy is long MSFT; Michael Murphy is long LEN; Michael Murphy is long TOL; Michael Murphy is long F; Michael Murphy is long INTC; Michael Murphy is long CAT; As of 8/13: Stephanie Link is long AAPL; Stephanie Link is long JPM; Stephanie Link is long WFC; Stephanie Link is long CSCO; Stephanie Link is long FB; Stephanie Link is long EBAY; Stephanie Link is long YUM.