Gary Reynolds, CIO at Courtiers, believes so.
“The companies that arguably stand to gain most from the recovering US economy are the very companies that suffered most in the credit crisis, that is, the banks,” he says.
US banks have dealt with their problems much earlier than their European counterparts. While other parts of the world dithered, Americans forced their banks to tidy up their balance sheets.
The result? US household debt has dropped from a pre-crisis level of 96% of GDP to 76% today. By comparison, British household debt has only just got down to 95%. Further, the US economy is domestically orientated with exports accounting for only 13% of GDP.
This could make them much better placed than most to deal with the overall deterioration in world demand.
“Over the last 40 years I have learnt that you bet against the US economy at your peril. So my pick to benefit from the US recovery would be five banking stocks,” according to Reynolds.
