JPMor­gan, Gold­man Share Op­pos­ing Views on US Stocks

The Economic Times - - Commodities Plus -

New York: Two big firms, JPMor­gan and Gold­man Sachs have two pretty di­ver­gent opinions about what you should own in the US stock mar­ket right now. So far, the dol­lar is mak­ing the dif­fer­ence in who’s right. Cus­tom in­dexes main­tained by both banks give the ad­van­tage to Dubravko Lakos-Bu­jas, the JPMor­gan chief US equity strate­gist who has been say­ing since De­cem­ber that com­pa­nies that get most of their sales from abroad would do bet­ter than do­mes­ti­cally ori­ented ones. Such multi­na­tional stocks are out­per­form­ing the broader mar­ket by al­most12 per­cent­age points in the past three months.

Lakos-Bu­jas’s bull case fore­saw just about every­thing that has gone right for the stocks: a weak­en­ing dol­lar, sta­bil­i­sa­tion in China’s econ­omy and a re­bound in com­modi­ties. “We con­tinue to like multi­na­tion­als as their earn­ings likely will sur­prise to the up­side over the com­ing quar­ters.”

On the flip side, Gold­man’s chief US equity strate­gist, David Kostin, re­it­er­ated as re­cently as April 4 a May 2015 rec­om­men­da­tion to buy the bank’s do­mes­tic­themed bas­ket, while sell­ing its in­ter­na­tional coun­ter­part. It’s a bet that prof­fered a nearly 50% five-year re­turn but is now fiz­zling out.

“A grow­ing econ­omy, ris­ing rates and a stronger U.S. dol­lar ben­e­fit do­mes­tic-fac­ing stocks,” Kostin wrote last month. — Bloomberg

ARINDAM Anna-Louise Jack­son

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