Jeffrey Saut, chief investment strategist and managing director of equity research at Raymond James, is close enough to US banks understand their promise and pitfalls.
He says: “I have actually received some questions lately asking if the run in banks is coming to an end, and not just in the short-term but for good.
“We think that’s ludicrous considering financials have largely underperformed the broad market going all the way back to the early 2000s and it’s going to require more than a two-month run to begin to correct that divergence.
“In the near term, yes, many of the banks have likely come too far, too fast, but pullbacks should still be for buying, in our opinion as the yield curve is largely expected to steepen further.”
On US phone carriers (the likes of Verizon, AT&T and T-Mobile), Saut is on the fence, particularly given opposition – from Trump no less – on proposed consolidation within the industry.
However, he states: “If we do experience a run of broad deregulation across the general business landscape, the big phone carriers could see some benefits in the form of pricing power, in addition to improving demand as the overall economy gets better.”
While I read closely and value the opinions of Lee, Saut and others at the heart of the action on Wall St, many fund pickers in the UK are less discriminatory in their US equity choices, i.e. preferring S&P 500 tracker funds to active managers flitting between sectors.
Still, as the equities rally and growth/value shift continues with pace, it is time to review your exposure to the world’s largest market ASAP.
*Make America Great Again
