Neptune’s Felix Wintle sees continues positive signs in strength of US domestic market
Felix Wintle, Neptune Investment Management’s investment director and head of US Equities, sees positive developments in the US that are allowing the domestic market to shrug off concerns about macroeconomic shocks.
After the recent strength of US equities, some investors are now expecting to see a pullback, believing that the market has risen too far and too quickly. However, we continue to be positive on the outlook for the US equity market due to attractive valuations, the strength of corporate America and also wider factors, such as the recovery of the housing market and the development of onshore energy. Therefore, a optimistic outlook remains for the US.
The ongoing recovery in the US has largely been domestically-driven, with external macroeconomic shocks – such as those in Italy and Cyprus – being shrugged off by the market. Instead, the strength of the US private sector and improving domestic economic fundamentals are driving the world’s largest market. With macroeconomic concerns abating, we expect Gross Domestic Product (GDP) growth of 2.3% in 2013, rising to historical trend growth of 3% in 2014. Data from a broad range of sectors, including manufacturing indices, housing data and perhaps most importantly, job growth, all highlight the resilience of the US economy, even in the face of the public sector headwinds created by both the fiscal cliff and the implementation of sequestration at the start of March.