It time for investors to withdraw from the U.S. stock market

Tips JPMorgan and Merrill Lynch do not contradict each other – and they both agree on the fact that U.S. stocks are interesting and worth investors there to invest, explains senior strategist IK “Aton” Alexey Kaminsky.

All anything, but only to other investment companies considered us stocks one of the best investments this year. Indeed, the September survey of portfolio managers Bank of America Merrill Lynch showed that investment in us securities rose to highs from January 2015 and market participants believe that stocks of companies from the United States “the most favorable market all over the world for the second consecutive month”. Financiers also pointed to the loss of interest in emerging markets, which in recent years actively withdraw funds. Whom to believe?

America is at the peak

The American market remains one of the most stable financial and regulatory havens in the world, said General Director of IC “freedom Finance” Timur Turlov. “Given the growth in corporate profits and continued productivity growth, I do not exclude that the U.S. is only at the beginning of the growth cycle of the economy. The us economy doesn’t look perekreditovanija, unemployment is low, consumer demand is growing. USA is still a center of innovation,” – says the financier.

Because of the trade wars, capital began to leave emerging markets in the US, this led to the fact that the difference between the dynamics of the US stock market and dynamics of stock exchange indices of other countries increased to the limit. Such a differential cannot be maintained for a long time, I’m sure Turlov. “Index time “converge” back. And either will shrink the American market, or grow up developing,” he explains.

The American market is now on the highs, and the next three months, its growth is hardly over, agree the experts interviewed.

“For a big correction of the US market down you need a good reason. As a rule, these macroeconomic factors. But the US economy is now looking very strong. The index of industrial production reached 35-year highs, consumer confidence is also at maximum levels since the early 2000s. the So-called risk of a recession within the next 12 months in the United States is minimal, and why the stock market should fall is unclear,” – said Kaminsky.

In addition, according to research by BofA Merrill Lynch, investors have built up significant amount of cash, which in the case of turbulence will support the American market.

According to Kaminsky, the gap between the dynamics in the U.S. and emerging markets will decline from improvements in the latter. “After a seasonal lull improve the situation in emerging markets, and there will be a return to investors. Apparently, this point of view and adheres to JPMorgan, advising to pay attention to the actions of these countries”, – the expert concludes.

Where to invest

The main risks in the us market are now associated with the escalation of trade wars, and with the fed tightening and aggressive increase in interest rates. However, the risk is always there, and buy us securities is not afraid and not later, according to respondents to analysts.

“The rise in the us stock market is fully justified by rising corporate profits, and valuation ratios P/E are now about long term averages over the past 20-25 years. Considering how much cash players have, we may at some point to even see the acceleration of price growth in the market. The best conditions for the rally not to think,” – said Kaminsky.

In such a situation is to buy securities from the S&P 500 index, as well as pay attention to industry with maximum productivity, including technology, pharmaceuticals, communications and entertainment, says Timur Turlov.

As for emerging markets, in the course of this year they will give in to the US market, says chief strategist “BCS global markets,” Vyacheslav Smoljaninov. The reasons for the weakening of the indices of the emerging markets currency crisis, which started in Argentina and spread to Turkey, slowdown in emerging economies and the threat of trade wars, the expert concludes.

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