Tags: Masters | US | companies | prosper

AllianceBernstein's Masters: US Companies 'Can Continue to Prosper'

By    |   Thursday, 11 December 2014 08:40 PM

U.S. companies' buoyant earnings have helped major stock indices continuously reach record highs this year, most recently last Friday. 

So can U.S. companies "continue to prosper" while overseas economies struggle? Seth Masters, chief investment officer at AllianceBernstein, asks in a commentary.

"The answer could be yes," he writes. "The U.S. is still in the early stages of a cyclical expansion, and we think the overall growth rate will be supported by key trends among consumers, governments, and companies."

Consumers and governments at all levels are trimming their debts, he says. Meanwhile, "companies are gaining market share globally, and U.S. manufacturing is now undergoing something of a renaissance," Masters says.

"We think that these trends could continue for a while and that they are positive for U.S. stockholders." That doesn't make the stock market "invulnerable," he says, but does show its "resiliency."

As for foreign stocks, just because the U.S. has outperformed many overseas markets over the past two years, that doesn't lessen the diversification benefit of investing abroad, Masters says.

Meanwhile, Dan Chung, chief investment officer at Alger, thinks the Nasdaq Composite index will break through its March 2000 peak of 5,132.52 next year.

The Nasdaq closed at 4,708.15 Thursday, 8.3 percent below its zenith.

"I am very confident that the Nasdaq will reach new highs," sending "a very positive, powerful" message to investors, Chung told USA Today.

The Nasdaq is a whole different animal than 15 years ago, he notes. It's less technology-centric, with more healthcare, biotechnology and consumer companies.

In addition, "the valuations today are much lower, with the Nasdaq's price-to-earnings ratio based on next year's earnings estimates in the high-teens," Chung says.

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U.S. companies' buoyant earnings have helped major stock indices continuously reach record highs this year, most recently last Friday. So can U.S. companies continue to prosper while overseas economies struggle?
Masters, US, companies, prosper
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2014-40-11
Thursday, 11 December 2014 08:40 PM
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