The stock market is headed higher but investors should make some changes in their portfolios to accommodate shifts in the landscape, Credit Suisse chief equity strategist Jonathan Golub told CNBC on Wednesday.
“You don’t want to be in cyclical stocks going into next year, because I think the economy is going to be weaker,” he said on “Fast Money.”
In fact, he just downgraded industrials and materials. “I think growth wins again.”
Cyclical stocks, which include companies that sell discretionary products, tend to not do as well when the economy slows because consumers turn away from them. Consumer staples, on the other hand, usually maintain demand.
“We upgraded health care because in an environment where you have slightly weaker growth — again, not recessionary, slightly weaker — you buy stuff like that,” Golub said.
He also has more confidence in tech stocks. He argued that October’s sell-off, which ravaged tech companies, was a “technical sell-off” that was less about fundamentals and more about positioning.
“In the near term, I think that tech is going to bounce very hard,” Golub said.