JPMorgan Strategist Sees Bear Market Over, Notes Stock Picks

J.P. Morgan Wealth Management considers the bear market to be over and sees opportunities now in mid-cap and select large-cap stocks, says Elyse Ausenbaugh, global investment strategist with the firm.

While the S&P 500 currently stands near the firm’s year-end target, JPMorgan expects the index to reach about 4,500 in 12 months, and to produce solid returns over the next 10 to 15 years, Ausenbaugh noted in an interview on CNBC’s “Squawk Box” on Thursday.

Notably, the JPMorgan strategist sees potential for active managers to select winning stocks.

Investors may be scared by the S&P 500′s elevated valuation, but stripping out the seven biggest names, valuations are actually below average, she said.

“So we are seeing some stock-picking opportunities in U.S. large caps, [and we’re] also taking a long, hard look at the mid-cap equity space in the United States, where we see the potential for investors to position for a reset of the cycle when that comes.”

The firm is close to year-ahead targets for the broad S&P 500, “so we’re navigating it with a little bit more selectivity and emphasizing to investors that they should be focused on alpha, not beta, but there is upside,” Ausenbaugh said.

“And I think it’s really important to remember what it is we hire equities to do in a portfolio in the first place, and that’s to be the engines of long-term, multi-year capital appreciation,” she said. “We still think that over the course of the next 10 to 15 years the S&P 500 is going to be able to annualize total returns north of 7%.”