Companies will deploy more cash next year as part of a third-year expansion of the bull market, with the S&P 500 rising 15 percent, Thomas Lee, chief US equity strategist for JP Morgan, told CNBC Friday.
But, he added, it will be a confusing year for active managers.
“We found that in the third year of a bull market, section rotation is the greatest,” said Lee, who was discussing his firm’s report on CNBC.
“So we think 2011 is going to be broken up into thirds, wherein the first third of the year, you want to own credit-sensitives, like the insurance companies, asset managers and the consumer cyclicals."
By summer, Lee recommended a shift into industrial cyclicals,” such as energy and airlines. He said to wrap up the last third “heavily focused on defensives.”
Lee said US GDP growth will accelerate to 3.5 percent in the last quarters of 2011, from 2.6 percent in 2010.
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CNBC Data Pages:
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CNBC's Companies in the News:
Bank of America
Goldman Sachs
General Electric
TJX
Capital One Financial
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Disclosures:
Disclosure information was not available for Thomas Lee or his company.
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