Twitter icon Email alerts icon Latest News RSS icon Magazine icon Stay connected:

View the article online at http://citywire.co.uk/wealth-manager/article/a729499

US veteran Cowart: this is most unloved bull in 40 years

by Matthew Goodburn on Jan 23, 2014 at 10:09

US veteran Cowart: this is most unloved bull in 40 years

The current bull market in US equities is perhaps the most ‘unloved’ rally of the past 40 years, according to industry veteran Ed Cowart.

Speaking in his latest update, Cowart said many are under-invested in the US market and would welcome a pullback to allow them to invest in equities.

‘I would make the general observation, based on my time in the investment business, that this is the most unloved bull market we have ever seen,’ said Cowart, who has 42 years of industry experience.

Cowart, who runs the Nordea 1 - North American All Cap fund on mandate, said US stock prices have advanced a long way since the market lows of 2009 but points to earnings growth, which he says has broadly kept pace with the market rises.

He said: 'There is no denying stock prices have advanced a lot from the depths seen in March 2009 but we must not lose sight of the fact earnings have advanced along with prices.’

'In 2009, S&P 500 earnings came in at $57; for 2013 we expect a figure of about $107, more than doubling in four years.'

While Cowart accepts share prices have outpaced earnings overall over the period, he still believes it is hard to make the case that the US market is now overvalued.

'In the aftermath of a severe financial crisis precipitated by over-leverage and widespread credit defaults, economic growth is slower than average as the excesses of the prior cycle are corrected.’

'After such events, economic growth has averaged about 2% rather than the 3-4% or higher, after more typical, inventory or Federal Reserve-induced recessions.’

Clean bill of health for corporates

Cowart points to corporates as one of the brightest spots in the slow recovery environment.

Sign in / register to view full article on one page

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

Sponsored Video: Bringing it all back home


As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.

Today's top headlines

Sponsored Video: Barings on investing in Frontier Markets


From Nigeria to Pakistan and from Kenya to Kuwait, frontier markets are catching investors' attention as never before.

More about this:

Look up the funds

  • Nordea 1 - North American All Cap BC USD
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them

Look up the fund managers

  • Ed Cowart
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them

More from us

Archive

On the road

Click here to find out more from the Audience Development team.

Sorry, this link is not
quite ready yet