Despite a volatile first half of the year, U.S. equities have blazed past the rest of the world.

Michael Bapis, managing director of The Bapis Group at Hightower Advisors, is on the lookout for the corners of Wall Street that can rally if the U.S. holds its lead.

He told CNBC’s “Trading Nation” on Monday about the two sectors that could have an even bigger breakout if U.S. markets can continue to outperform the rest of the world, and the one group to avoid.

• Geopolitical events will make market noise for the rest of the year whether it’s tariff wars or elections in the U.S. and Europe. These will likely not have a major long-term impact, but markets could react in the short term.
• Two sectors that could see the biggest gains are financials and technology, especially semiconductor stocks.
• Financials have lagged this year. This should change: tax stimulus and a rising interest rate environment should be massively beneficial.
• The best pick in the financials space is J.P. Morgan Chase. It’s trading at a reasonable price-to-earnings ratio and should have positive earnings to report come Friday.
• Intel looks to be one of the best names in technology. After a roughly 50 percent rise over the past 12 months, it could break out even more – especially since its products have a place in so many different technologies.
• One area to watch out for is the auto space. Any tariffs and trade tensions will hit these stocks harder than any other group. Ford, for example, shipped 80,000 of its vehicles to China last year, making it especially susceptible changes in trade policy between the economic powerhouses.

Bottom line: If the U.S. can lead growth through 2018, financials and technology should outperform. Auto stocks might not be so fortunate.

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