Financial Services

Despite earnings slowdown and recession fears, US stocks are still seen as best bet on the globe


Some also argued the U.S. still has more room to run in its record-long expansion. Fundstrat Global Advisors’ Thomas Lee said key data including investment spending and employment ratio show the U.S. is in midcycle, rather than late cycle.

Still, the slowdown in the U.S. is by no means subtle. The first-quarter earnings growth forecast for the S&P 500 companies has turned negative, a drastic cut from the greater than 3 percent growth seen in late December. However, the weakness follows a blockbuster year in 2018, when corporations reaped the benefits of the unprecedented tax cuts.

“Remember this is coming after a very, very strong year of earnings growth, so you’d expect some pullback,” Brown said. “People are still relatively optimistic given the amount of gains we had last year. A lot of it is coming from corporations cutting the bottom lines and still trying to hold line on cost rather than on the revenue side.”

Wall Street is still mostly bullish on stocks. The average S&P 500 target for 2019 from the 17 top analysts is 2,947, more than 100 points higher than current levels, a CNBC analysis shows. Credit Suisse raised its year-end forecast for the S&P 500 to 3,025 from 2,925, saying the “receding” risks will drive the market higher.



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