Stock valuations for large-caps are no longer cheap, but they are still a bargain relative to bonds and to small-caps, said Jack Caffrey, Equity Portfolio Manager for JPMorgan Private Bank. Caffrey added that he expects consumer discretionary stocks to perform well considering the drop in oil prices and job gains. He said technology and financials make up more than a third of the S&P 500, so those two sectors need to participate for momentum to continue. Finally, Caffrey said outside of a geopolitical shock from Europe, a lack of job gains would reverse the virtuous circle currently lifting the market.
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