It’s Time to Take on More Risk: JPMorgan Analyst

Rebalancing caused stock market sluggishness last week, but the rally still has legs, JPMorgan Chief U.S. Equity Strategist Thomas Lee said Monday on CNBC.

“I think last week could’ve been attributed to rebalancing,” he said. “Treasuries outperformed the last two weeks, so I think some of the rebalancing was taking place.”

Lee, who raised his Election Day price target for the S&P 500 to 1,495, made the comments on “Fast Money.”

“We’re pretty optimistic about October,” he said. “I have a very strong sense funds are trying to sit this rally out. They’re not believers. They’re very worried about the macro issues and about Election Day and ‘fiscal cliff,’ and then you look at valuations. I think they’re very supportive when you look at stocks vs. credit.”

Although it looks to be a “very tough earnings season,” Lee said that it was too early to call a peak in earnings.

“Generally, when you have a weak second half of September, Octobers are generally pretty strong,” he added.

Posted by Bruno J. Navarro, Producer.

Trader disclosure: On Oct. 1, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s “Fast Money” were owned by the “Fast Money” traders: Steve Weiss is long TOT; Steve Weiss is long HK; Steve Weiss is long QCOM; Steve Weiss is long AIG; Steve Weiss is long M; Steve Weiss is long WLP; Steve Weiss is long VZ; Steve Weiss is long VOD; Steve Weiss is long T; Steve Weiss is long CLNY; Steve Weiss is long AMTG; Steve Weiss is long MTGE; Steve Weiss is long BAC; Steve Weiss is long EUO; Steve Weiss is short VALE; Steve Weiss is short BHP; Steve Weiss is short RIO; Steve Weiss is long BBBY; Steve Weiss is short AAPL PUTS; Steve Weiss is short AKS; Pete Najarian is long AAPL; Pete Najarian is long C; Pete Najarian is long FB; Pete Najarian is long INTC; Pete Najarian is long SBUX; Pete Najarian is long MSFT; Pete Najarian is long TCK; Pete Najarian is long WLT; Pete Najarian is long BX; Pete Najarian is long KFN; Pete Najarian is long GS CALLS; Pete Najarian is long POT CALLS; Stephanie Link is long AAPL; Stephanie Link is long JPM; Stephanie Link is long SBUX; Stephanie Link is long NKE; Stephanie Link is long JPM; Stephanie Link is long WFC; Steve Grasso is long AET; Steve Grasso is long ASTM; Steve Grasso is long AUO; Steve Grasso is long BA; Steve Grasso is long F; Steve Grasso is long LF; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long P; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is long WYNN.

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