Tags: Rosenberg | US | stocks | earnings

Gluskin Sheff's Rosenberg: US Stocks Less Attractive Than Overseas Stocks

By    |   Wednesday, 04 March 2015 07:20 AM

With U.S. stocks having enjoyed a six-year bull market and continuously hitting record highs in recent days, many experts say markets overseas offer better value.

David Rosenberg, chief economist at Gluskin Sheff, is one of them.

"In the U.S., the market overall is definitely richly priced with a 17-times forward price-to-earnings multiple," he writes in the Financial Post.

"In terms of regions, parts of Asia and the euro area look quite compelling right now."

To be sure, Rosenberg isn't bearish on all U.S. stocks. "The sectors that offer the most upside are those that are not hit by the negative earnings impact from the strong greenback and also have earnings visibility at a time when the analysts are taking a knife to their earnings forecasts."

That includes technology, healthcare and, to a lesser extent, consumer cyclicals, he says.

As for earnings, the 485 S&P 500 companies that reported fourth-quarter numbers as of Friday generated blended profit growth of 3.7 percent, according to FactSet. And analysts predict profits will fall 4.9 percent in the current quarter, according to Bloomberg.
http://www.bloomberg.com/news/articles/2015-03-03/u-s-stock-index-futures-little-changed-after-benchmark-records

Newsmax Finance insider Sean Hyman isn't so hot on the U.S. stock market either.

"It's elevated right now," the editor of Newsmax' Ultimate Wealth Report newsletter, tells Newsmax TV. "I don't expect it to perform as well over the next 12 months as it has over the past 12 months." The S&P 500 has returned 13.9 percent during that period.

European stocks are more attractive now, with lower valuations than in the U.S., he notes. The European STOXX 600 index had a forward price-earnings ratio of 16 Friday, compared with 17.8 for the S&P 500.

Could the drop by U.S. stocks be as severe as 50 percent?

"It could happen," Hyman predicts. "Corrections are generally 10 percent, 20 percent or 30 percent. But we have had a couple of corrections — in 2000 and 2008 — that were on the tune of 40 percent, 50 percent."

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With U.S. stocks having enjoyed a six-year bull market and continuously hitting record highs in recent days, many experts say markets overseas offer better value.
Rosenberg, US, stocks, earnings
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2015-20-04
Wednesday, 04 March 2015 07:20 AM
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