US Equities: Opportunities Amid Turbulence

Key takeaways:

  • We believe S&P 500 earnings growth will likely face pressure in the second half of the year but should remain positive in 2022.
  • In our analysis, US stocks continue to trade at a premium versus other markets. We believe these higher relative valuations reflect stronger corporate profitability, better return on equity, and more robust growth in comparison to equity markets in other parts of the world.
  • Long-term secular growth trends, such as health care innovation, digital transformation and the rise of fintech, remain deeply relevant even as economic growth moderates. We believe they will likely create productivity and profitability tailwinds for companies operating in these integral sectors.
  • We believe businesses with robust competitive positions, strong pricing power and healthy financials should perform well in any market environment.
  • We believe outperformance is generated by identifying long-term winners rather than timing short-term trades in the market. As such, we view the current volatility as a compelling buying opportunity.

The short video below talks more about these same themes:

Current US economic outlook