(Bloomberg TV) Jonathan Golub RBC Capital Markets is bullish on US stocks.
"Non-U.S. markets are expected to see slightly faster earnings growth over the coming year," RBC strategist Jonathan Golub wrote in a note Monday.
"However, developed ex-U.S. has missed lofty expectations by a wide margin in each of the past four years."
Also, e xpectations for earnings growth in Europe have been sharply revised downward this year.
Here's why US stocks will outperform in the coming years, according to Golub:
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US economic growth, as measured by GDP, has outpaced other G10 economies since the end of the recession and is forecast to keep doing so, as the chart below shows.
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US companies have been more likely to meet their forecasts for earnings growth than other developed countries over the past several years.
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US stocks have more exposure to faster-growing sectors like technology and health care.
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Higher US yields support higher valuations for stocks.
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Price-to-earnings ratios tend to move in tandem with the dollar, and will climb if the dollar rally continues.
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Adjusting for sector mix, US stocks are not expensive versus the rest of the world.
(RBC Capital Markets)
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