Salient to Investors:
American companies are the 5 biggest in the world for the first time since the end of 2004 – Exxon , Apple, Google, Berkshire Hathaway, and Wal-Mart . PetroChina, which was one of 3 Chinese stocks in the top 5 last year, has slipped to No. 6. 26 of the world’s top 50 companies by market value are American versus 21 at the end of 2007 and 35 in 2001. 51 percent of the 103 companies in the S&P 500 so far reporting trailed analyst sales forecasts, the most since 2009.
Unlike in the 1990s, when gains were concentrated in the largest companies, the advance since 2009 has been spread evenly among the S&P 500’s constituents. A gauge that strips out market bias in calculating the S&P 500’s return is up 190 percent since March 2009, or 1.5 times as much as the market-weighted gauge.
Henk Potts at Barclays Wealth said the US has done an incredible job of maintaining the recovery and encouraging the consumer, and ranks US shares as their top asset for 2013. Potts said the aggressive policy is working, the US consumer is in great shape.
Howard Ward at Gamco Investors said China’s economy has failed to live up to the expectations priced into its stock market, while the US economy has exceeded very low expectations, making the US the better risk/reward option.
Barry Bannister at Stifel Nicolaus said we need global GDP growth because we are not going to new highs without global GDP.
The IMF predicts world growth of 3.3 percent in 2013 versus 4.8 percent in 2012 and 5.7 percent in 2011.
Since 1990, quarters in which consumer stocks rallied the most or second-most in the S&P 500, GDP expanded 3.1 percent versus its historic average of 2.9 percent.
Consumer companies are beating earnings estimates by 4.3 percent so far this season, 0.5 percent more than the rate for the S&P 500. 11 of the 15 companies so far reporting have exceeded analyst estimates.
Tristan Hanson at Ashburton said the US is a bright spot within the developed world: housing, credit, and the labor market are all recovering.
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