Sometimes it takes a stranger to fully appreciate something.
Europe’s largest asset manager Amundi Asset Management has produced research showing why US stocks have outperformed the world and why that superior performance can continue.
Admitted by two from his Boston office, Craig Sterling, his head of US equities research, and Marco Pirondini, head of US equities, Amundi made a distinction between the US stock market, which is a game. for many of the world’s most profitable companies and the United States economy.
The S&P 500 SPX,
has outperformed the rest of the developed world as measured by the MSCI Europe, Australasia and Far East 990 300 index,
in 19 of the last 30 years, and with cumulative returns of 1574% versus 235%. That’s no accident, since American companies have higher profit margins and consistently outperformed their cost of capital.
Amundi hopes that superior performance will continue.
“Considering the aftermath of the pandemic and the recession, we believe that economic uncertainty has created a lack of clear visibility into earnings, which is likely to further impact underperforming companies. Beyond the lower investment in innovation, technology and healthcare inherent in non-US stock markets, structural and economic pressures persist as growth capital expenditures are reduced, ”he says.
While valuations in the United States are not cheap, investors get what they pay for, with a better return on investment in cash flow.
Much of the superior performance comes from the dominance of technology in the United States, which the Amundi pair hopes to continue. “The combination of world-class universities that develop technology and serve as launching pads for startups to commercialize it, a well-developed venture capital industry, and a cultural willingness to take risks make it difficult for other regions of the world to outperform the US. . “, Says the pair, with only China proving to be a viable global competitor.
In addition to technology, monetary and fiscal policies that place greater emphasis on the stock market are an asset to US stocks, as are increased threats of shareholder activism and M&A activity. Lower taxes and a flexible labor market also provide a boost to US markets, the pair says.
Exceptionally, the pair supports the corporate culture of share buybacks, which are much less prevalent outside of the US “A key advantage of share buybacks is that they allow capital recycling throughout the economy, making the Capital can end up in the most innovative hands and not trapped within less efficient and more mature companies, ”says Amundi.
The buzz
On Tuesday, there were 53,507 new cases of coronavirus in the U.S., a minimum of three weeks, according to data from the COVID-19 follow-up project. Meanwhile, China reported its highest outbreak in weeks, 101, as Japan and South Korea also reported increases in cases.
It’s a great day in Washington, DC, where the CEOs of the world’s largest technology companies, Amazon.com AMZN,
Apple AAPL,
Facebook FB,
and Alphabet GOOGL,
It will appear by videoconference before the Antitrust Subcommittee of the Judicial Power of the Chamber, from noon on the East. The Federal Reserve announces its latest interest rate decision at 2 pm, and President Jerome Powell will hold a press conference at 2:30 pm Negotiations are expected to continue with a new stimulus bill, with a big gap on issues including whether the $ 600 per week extends additional unemployment benefits.
As the earnings season continues, General Electric GE,
reported a higher-than-expected loss but better-than-expected revenue and cash flow.
AMD Advanced Microdevices,
The shares may hit record levels after the microchip company reported second-quarter earnings that exceeded expectations and raised its forecast for the full year. Starbucks SBUX,
reported a loss in a 40% drop in sales at the same store, but shares of the coffee chain increased in pre-market trade. The software company Shopify SHOP,
it emerged after a much stronger earnings report than expected.
The market
After the 205 point drop in the DJIA industrial DIA,
on Tuesday, US stock futures ES00,
YM00
NQ00,
marked a brighter start.
Gold GC00,
and SI00 silver,
Advanced futures.
The performance in the 5-year gilding TMBMKGB-05Y,
it hit a record low of -0.135% before bouncing higher.
Random readings
MacKenzie Scott said Tuesday that he has donated about $ 1.7 billion of his fortune in the past year since his divorce from Amazon CEO Jeff Bezos.
A track? Democratic presidential nominee Joe Biden was photographed with handwritten notes on Senator Kamala Harris, who many believe will be her running mate.
There is an asteroid near Mars, and it was discovered by two Indian teenagers.
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