“[But] the market becomes much more attractive. So in general, the market is fairly valued but there’s more to go in 2010 if the economy continues to improve.” (Read below for Stepherson's stock and sector picks.)
In the meantime, Hennessy said although consumers are slowly returning, they are not necessarily coming back to the once sought high-end retailers.
“They’re in the middle to low-end,” he said. “People are understanding how to spend their money better and they’re saving at the same time. It’s going through a lot of different sectors, not just the retail sector.”
More CNBC Market Intelligence:
Hennessy said companies are acquiring information solutions to replace the numerous staff positions lost during the layoffs in the last year.
“They’ve laid off all their employees and now it’s time to improve their margins and you can do that through technology that’s already existing,” he said. “So a lot of money is going to be spent on the information technology.”
Companies like Broadridge Financial Solutions, Automatic Data Processing, Computer Sciences should benefit, Hennessy said.
However, other than the companies above and other solutions to technology for companies, Hennessy said he would avoid the technology sector.
No immediate information was available for Hennessy or Stepherson.