According to James Swanson, Chief Investment Strategist at MFS Investments, we are experiencing an interesting combination in the US: “We have accelerating growth, rising profits and still, stable to falling interest rates”.
On the other hand, outside the US growth is faltering, especially in China, Japan, and recently, also in Europe.
Within this environment, James Swanson highlights that there are several signals supporting US Equities:
- Rising revenues, profits and margins.
- Capex has started to move up from relative low levels
- Lending to financial companies and basic sectors is also begging to rise, something that hasn’t been seen for the last five years
In the attached video, James Swanson alerts investors to “be choosy, be diversified”, and to “focus on US large caps” which are doing very well, though “some support may be needed from slower outer markets”.